Yun to Lawmakers: Market Won’t Improve Without Action on Supply
According to Lawrence Yun’s (chief economist for the National Association of REALTORS®) statements to the Senate Committee on Banking, Housing and Urban Affairs, though growth in home prices is slowing, a nationwide decline is unlikely. While the potential for weaker sales may help increase housing inventory in some markets, it won’t be enough to ease affordability constraints. Yun focused specifically on the lingering effects of COVID-19 on the market, decades of underinvestment and underdevelopment, and fluctuations in mortgage rates. “In the near term, I do not expect the situation to change appreciably,” Yun said at the hearing. “Historic undersupply in the market, combined with continued demand, will likely drive ongoing issues with affordability for many Americans. Any short-term price adjustments, if they occur, will be less consequential compared to the immense longer-term housing affordability challenges we face as a country.”
Source and link to the full article: Yun to Lawmakers: Market Won’t Improve Without Action on Supply | Realtor Magazine
Climbing Mortgage Rates Leave Many Buyers ‘Priced Out’
Based on the Federal Reserve’s moves to rein in soaring inflation, interest rates are expected to continue climbing. Fixed mortgage rates continued to edge upward recently, putting added pressure on summer homebuyers who are burdened with steep borrowing costs and stubbornly high home prices. The sole exception was adjustable mortgage rates, which dropped slightly. Still, interest rates for both fixed- and adjustable-rate mortgages remain significantly higher than they were this time last year.
Source and link to the full article: Climbing Mortgage Rates Leave Many Buyers ‘Priced Out’ | Mortgages and Advice | US News
Existing-Home Prices Hit New Record as Sales Slow
According to the National Association of REALTORS® recent report, prices for existing homes climbed to a record high in June, continuing at a breakneck pace with double-digit-percentage annual increases. The median price for an existing home rose to $416,000 last month, up 13.4% compared to a year earlier. Home prices continued to climb even as sales cooled in June. For the fifth consecutive month, existing-home sales, which includes transactions for single-family homes, townhomes, and condos, posted a drop. Sales were down 5.4% month over month in June and have fallen 14.2% compared to a year ago, according to NAR’s report. “Falling housing affordability continues to take a toll on potential home buyers,” says NAR Chief Economist Lawrence Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.” A separate report released recently by NAR showed that housing affordability has dropped as mortgage payments have spiked 51% in one year. Meanwhile, the median family income has risen just 4.5% in that time.
Source and link to the full article: Existing-Home Prices Hit New Record as Sales Slow | Realtor Magazine
Homebuyer Competition Drops to Lowest Level in Over Two Years
Based on Redfin agents’ data, nationwide, 49.9% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in June. That’s the lowest share since May 2020 and the first time the bidding-war rate has been below 50% since that same month, when the housing market was at a near standstill due to the onset of the coronavirus pandemic. June’s bidding-war rate compares with a revised rate of 65% one year earlier and 57.3% one month earlier and marks the fifth-straight monthly decline. On an unadjusted basis, June’s bidding-war rate was 51.5%, down from 66.7% one year earlier and 62.5% one month earlier. An offer is considered part of a bidding war if a Redfin agent reported that it received at least one competing bid.
Source and link to the full article: Homebuyer Competition Drops to Lowest Level in Over Two Years (redfin.com)