Homeowners See 12-Month Equity Gain of $64K
According to a new report from CoreLogic, rising home prices keep pushing up equity for homeowners. The average homeowner gained about $64,000 in equity from the first quarter of 2021 to the first quarter of this year. About 62% of all properties nationwide saw an increase in annualized equity gains in the first quarter. California, Hawaii, and Washington posted the highest average equity increases at $141,000, $139,000, and $114,000 respectively, according to the report. This chart from CoreLogic shows the average equity gains from last year’s first quarter to this year’s in each state across the country.
Source and link to the full article: “Homeowner Equity Insights,” CoreLogic (June 9, 2022)
The ‘Lumber Bubble’ May Have Just Burst
Based on the National Association of Home Builders reports, since the pandemic, lumber prices have skyrocketed to record highs, adding to new-home construction costs. But prices are now coming down. Lumber prices have fallen 12% recently, reaching a new low in 2022. That could be welcome news for new-home buyers and builders. Over the past year alone, the swings in lumber prices have prompted the price of a new single-family home to rise by more than $18,600. In the last three months, lumber prices have started to come down as the housing market shows signs of slowing and interest rates rise. A glut is forming in the lumber market as inventories begin to pile up. Lumber buyers have slowed their orders, and sawmills are beginning to slash their prices, The Wall Street Journal reports. Lumber prices have fallen 47% year to date. They are down 65% from a 2021 record high of $1,733 per thousand board feet. The big drops should help ease inflationary pressures in the housing market, and the costs to build should come down, Markets Insider reports.
Source and link to the full article: “Lumber Bubble 2.0 Just Burst—Here’s When to Expect the Best Deals,” Fortune.com (May 27, 2022) and “Lumber Prices Plunge 12% to New 2022 Lows as Wood Inventories Start to Pile Up,” Market Insider (June 1, 2022)
Home Prices Soar to New Record High
According to realtor.com® reports, the median national home price climbed to an all-time high in May, reaching $447,000. Buyers snatched up listings a week faster than a year ago. But despite higher prices and faster sales, housing analysts say there are signs of a slowing housing market. Active inventory rose 8% annually, the first time that benchmark has been reached in nearly three years, realtor.com®’s monthly housing trends report shows. A rising number of homeowners may be growing more confident in selling. “Among key factors fueling the inventory comeback are new sellers, who are listing homes at a rate not seen since 2019, as well as moderating demand, with pending listings declining year-over-year in May,” says Danielle Hale, realtor.com®’s chief economist. “While this real estate refresh is welcome news in a still-undersupplied market, it has yet to make a dent in home price growth, partially due to increases in newly listed, larger homes and because the typical seller outlook is quite high, likely shaped by recent experiences of homeowners who sold.”
Source and link to the full article: realtor.com®
Mortgage Rates Turn Upward Again
Based on a statement from Sam Khater, Freddie Mac’s chief economist, following three weeks of declines, mortgage rates reversed course and headed back up. The 30-year fixed-rate mortgage averaged 5.23% for the week ending June 9th; a year ago, it averaged below 3%. Increased economic activity and incoming inflation data were behind the most recent rate increases recently. “The housing market is incredibly rate-sensitive, so as mortgage rates increase suddenly, demand again is pulling back,” he says. “The material declines in purchase activity combined with the rising supply of homes for sale will cause a deceleration in price growth to more normal levels, providing some relief for buyers still interested in purchasing a home.”
Source and link to the full article: Mortgage Rates Turn Upward Again | Realtor Magazine