Finally, some excellent news on the housing entrance for consumers … properly, type of.
Home inventories, as measured by lively listings, soared at a record-high year-on-year charge of 31% in July, in accordance with Realtor.com. That marks the third straight all-time month-to-month peak.
The excellent news is this implies extra properties from which potential consumers can select.
The unhealthy information? It displays the unaffordability of properties for a lot of would-be consumers.
“The U.S. housing market continues to move toward more evenly balanced supply and demand compared to the 2021 frenzy,” Danielle Hale, Realtor.com’s chief economist, mentioned in a press release.
“Our July data shows elevated mortgage rates left many buyers tightening their budgets and sellers responding with price reductions, while home shoppers who kept searching saw more available options.”
The 30-year fixed-rate mortgage averaged 4.99% within the week ended Aug. 4. That’s down from 5.3% per week earlier however nonetheless up from 2.77% within the year-earlier week, in accordance with Freddie Mac.
New Listings
Meanwhile, “new listings declined in July, suggesting that some prospective sellers are wondering what recent market shifts mean for their plans to list,” Hale mentioned.
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“But data indicates that homeowners grappling with this decision are still in a good position in many markets, with buyer interest keeping well-priced homes selling quickly.”
In addition, “many sellers have a substantial equity cushion to leverage, thanks to the past decade of rising prices,” she mentioned. “Whether or not they take advantage of these opportunities will be key to inventory trends moving forward.”
Another piece of fine information got here from a New York Federal Reserve Bank shopper expectations survey. That report confirmed that the median anticipated enhance in residence costs one yr from now dropped to three.5% from 4.4% in June and 6% in January.
That’s the third consecutive lower and the bottom studying since November 2020.
Weak Purchase Sentiment
On the unhealthy information aspect, Fannie Mae’s Home Purchase Sentiment Index fell 2 factors in July to 62.8, its lowest degree since 2011. Only 1 of each 6 shoppers (17%) surveyed say it’s a superb time to purchase a house. At the identical time, two-thirds (67%) say it’s a superb time to promote, down from three-quarters (76%) in May.
“The Sentiment Index has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” Doug Duncan, Fannie Mae’s chief economist, mentioned in a press release.
To be certain, “with home-price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed,” Duncan mentioned.
“Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision, believing that home prices may drop.”
Bottom line: The index outcomes “appear to confirm our forecast for moderating home sales over the coming year,” Duncan mentioned.
Source: www.thestreet.com”