Real Estate Updates #2 Don't MISS THIS!!!
Here are the latest trends and discussions going on in the US Housing market
Mortgage Rates are Falling, but Buyers are still facing obstacles
Yahoo wrote an article this week that sums up the experience home buyers are experiencing.
Mortgage rates have seen a 4 week consecutive decrease. According to Freddie Mac, the average rate on a 30 yr fixed mortgage dipped to 6.28% from 6.32% the week prior. This refelcts the decline in the 10 year treasury yield since early in March- which was kicked off by the banking crisis.
Inflation is believed to be cooling but limited housing inventory is leading to a housing crisis of limited for sale homes vs a housing crisis of falling prices which people are hopeful for. Many economists expected to see inventory rise in 2023 due to layoffs, and recessionary pressures. Which is not off the table.
With a decrease of 4% in mortgage applications we are seeing trends point to less buyer demand over the next few months. Less buyer demand and less inventory means that prices will not be decreasing anytime soon in Florida especially.
Tale of Two Housing Markets: Prices Fall in the West While the East Booms
Interestingly enough there is a different story being told for housing out in the Western US. According to the Wall Street Journal, there are 2 stories being told in US housing. 1 is a story housing prices coming down from record highs, another is a story of prices stabilizing and even increasing in other areas. Questions are still being posed as to whether or not the east coast is potentially less risk averse to a pricing crash as the west coast is experiencing now.
According to Redfin Data, “Limited new listings are making it feel like a sellers market even though sales are down by double digits” At a supply of 3-4 months depending on the area, experts agree that a more balanced market will sit at 6 months of supply. This means that we need to see a drastic boom in inventory still. Historically, the inventory booms happen in the spring. Which has not been the case thus far.
A Case to be Made that the Worst of the Housing Slump is Behind Us.
Go Banking Rates put out a piece, breaking down 4 perspectives of why the worst of the housing slump could be behind us. In this article they mention:
Wall Street putting money into home builder stocks.
Many investors are banking on home builders like Lennar and DR Horton to bring their stock values back to all time highs which suggests a coming uptick in activity.
New homes looking lucrative.
Considering that many people are sitting on their existing homes with a lot of equity or low interest rates, the incentives to sell are not that high. This gives new builds a nice appeal to home buyers.
Builders offering perks to prospective buyers.
Everywhere you look, the best deals seems to be with large builders selling homes and lowering their already high margins. There are so many incentives from concessions to budget benefits that are giving builders and upper hand in the buyers market.
Home Prices trending downward.
Dips in prices have already taken place, this means that as buyer activity increases we are now heading back towards a potential growth in housing prices again.