The share of first-time homebuyers increases by almost 50% - Industry Outlook

By Troy Van Every | October 26, 2022 | Mortgage

Why Are Homeowners Seeing Prices Drop?

According to, home prices are down month-over-month but still up year-over-year annually. For just about any homeowner, talk of falling home prices can spark panic. With homeownership being the major financial and personal investment it is, there's a natural anxiety that comes with any potential threat to that investment. However, housing market activity to date does not show a year-over-year decline in home prices. While some data sets show small month-to-month home price declines, month-to-month data is more volatile and does not signal a drastic shift in the market on its own. There is a marked deceleration in home price growth due to a combination of already high home prices, high mortgage interest rates, low housing inventory and economic uncertainty on a larger scale. Many would-be homebuyers are simply opting out of a purchase now. As a result, properties on the market sit a bit longer, and sellers are dropping their asking prices more often than during the previous two years. “The best explanation is that there is a bit of a disconnect between what sellers are expecting and what buyers are willing and able to pay,” says Danielle Hale, chief economist at Source and link to the full article: Why Are Homeowners Seeing Prices Drop? | Real Estate | U.S. News (  

Every Time Mortgage Rates Rise, Buyers Need to Make This Much More to Afford a Home

Based on the® data team reports, the pain the higher rates have wrought on the housing market is already showing up in the high numbers of buyers who can no longer qualify for a mortgage or are simply giving up as their purchasing power continues to plummet. We all realized that rising mortgage rates were going to mean higher monthly payments. But how much, exactly? We wanted to give prospective homebuyers a real road map to what’s going on and what’s going to happen in the coming weeks and months. How much does the pool of homebuyers shrink with each percentage point increase in the mortgage rate? And how much more do households need to earn to make monthly payments on a new home? The numbers tell the tale: Roughly 3 out of every 4 U.S. households can no longer afford the monthly mortgage payment on a median-priced home of $427,250 with a mortgage rate of 6.7%. (This was the median list price in September using the most recent data.) Mortgage rates have more than doubled since the start of the year, rising from the low 3% range to nearly 7% for 30-year fixed-rate loans, according to Freddie Mac. That means buyers need a six-figure household income of about $124,000 to buy the median-priced home, according to our analysis. However, just one year ago, when rates were about 3%, buyers would have needed to earn only about $89,000. That difference equates to around 20 million U.S. households that are priced out of the median-priced home in the span of a single year. Source and link to the full article: As Mortgage Rates Rise, Buyers Need To Make This Much More To Afford a Home (  

The share of first-time homebuyers increases by almost 50%

According to a recent report from Zillow, one group of borrowers is actually benefiting from the high interest rate environment, first time homebuyers. First-time buyers now represent 45% of all buyers, up from 37% of borrowers surveyed by Zillow in 2021. This group pulled back from the market during the pandemic due to rapidly rising home values and increased competition, the report said. But with rising mortgage rates, fewer homeowners are looking to move, creating ample opportunity for first-time purchasers. Source and link to the full article: The share of first-time homebuyers increases by almost 50% | National Mortgage News  

Softwood Lumber Prices Fall for the Second Consecutive Month in September

Based on the National Association of Homebuilders update, prices of building materials decreased by 0.3% last month. The Producer Price Index (PPI) for building materials declined marginally in September by 0.3%, while the PPI for goods to inputs to residential construction posted a 2.3% decline in prices since June, the largest three-month drop since April 2020. The index for service inputs to residential construction declined for the sixth consecutive month in September but remains 3.3% higher on a year-over-year basis. The PPI for softwood lumber (seasonally adjusted) declined 2.9% in September following a 5.2% drop in August. Softwood lumber prices are 14.5% higher than they were a year ago but have fallen 39.6% since March. Source and link to the full article: Softwood Lumber Prices Fall for Second Consecutive Month in September | Builder Magazine (