The housing market is in bother, as costs and mortgage charges stay elevated.
So it’s no shock that builder confidence fell for the eighth straight month in August, marking the worst interval for the reason that housing disaster started in 2007.
The National Association of Home Builders/Wells Fargo index of builder confidence slid 6 factors in August from July to 49, breaching the break-even measure of fifty for the primary time since May 2020, early within the covid pandemic.
“Elevated interest rates, ongoing supply chain problems and high home prices continue to exacerbate housing affordability challenges,” the NAHB mentioned in a press release. It’s “another sign that a declining housing market has failed to bottom out.”
The continued rise in development prices additionally damage, NAHB Chairman Jerry Konter mentioned. “And in a troubling sign that consumers are now sitting on the sidelines due to higher housing costs, the August buyer traffic number in our builder survey was 32, the lowest level since April 2014, with the exception of the spring of 2020 when the pandemic first hit.”
Things are dangerous sufficient that NAHB Chief Economist Robert Dietz mentioned we’re struggling a “housing recession.”
Looking ahead, “the total volume of single-family starts will post a decline in 2022, the first such decrease since 2011,” he mentioned.
Given all of the dangerous information, it’s no marvel that properties have gotten unaffordable for a lot of potential consumers.
The median existing-home gross sales value hit $416,000 in June, leaping 13.4% from a 12 months earlier, in response to the National Association of Realtors That marked 124 straight months of year-over-year will increase, the longest streak on document.
And the 30-year fixed-mortgage fee averaged 5.22% within the week ended Aug. 11, up from 2.87% a 12 months in the past, in response to Freddie Mac.
“Home prices have increased at a pace that far exceeds wage gains, especially for low- and middle-income workers,” NAR Chief Economist Lawrence Yun mentioned in a press release.
The Silver Lining
On the intense aspect, “as signs grow that the rate of inflation is near peaking, long-term interest rates [will] stabilize, which will provide some stability for the demand side of the market in the coming months,” Dietz mentioned.
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Meanwhile, on-line financial institution Tangerine lists the cities the place properties are promoting quickest, utilizing knowledge from actual property brokerage Zillow. Tangerine measures the variety of days from when a proposal is made till a sale is closed.
Here’s the record:
1. Seattle: 41.92 days,
2. Salt Lake City: 42.24 days,
3. Olympia, Wash.: 42.41 days,
4. Bremerton, Wash., 43.60 days,
5. Ogden, Utah: 43.85 days,
6. Colorado Springs, Colo.: 45.56 days,
7. San Diego: 45.67 days,
8. Vallejo, Calif.: 45.93 days,
9. Fort Wayne, Ind.: 46.46 days,
10. Columbus, Ohio: 46.84 days.