HouseCanary Report: ‘Bleak Picture For Housing Affordability’

National brokerage HouseCanary’s new Market Pulse report shows troubling trends in housing affordability.

The report underscored the shortage of homes with selling prices under $200 thousand. While net new listing activity is up in other pricing categories, it’s down 30% for these homes from the same time last year. 

List-to-sale price ratios show a seller-friendly environment staying put, hovering slightly above 100.

“The record growth in home prices over the past year driven by short supply has made homeownership less affordable for many Americans, especially for would-be first-time homebuyers and those searching for homes under $200K. It’s also worth noting that mortgage rates have increased recently, topping 3% for the first time since early July,” said Jeremy Sicklick, Co-Founder and Chief Executive Officer of HouseCanary.

“Higher borrowing rates, in tandem with lofty prices, could potentially limit the demand for new homes and refinances. Now that we are exiting the peak summer market season, median prices – while still near record highs – are beginning to cool off, especially with the holiday season right around the corner. We continue to see prospective buyers making above-list price offers on homes given the ultra-competitive market environment and if the supply shortage holds through the winter, we could expect to see additional rapid price growth in spring 2022, but at a lower rate compared to 2021.”

Washington is trying to mitigate the lack of housing under $200k by expanding affordable housing programs. On Thursday Freddie Mac announced plans to offer at least $3 billion in Single-Family affordable housing bonds. The bonds are intended to boost homeownership, especially in low-income markets.

“Through this new, multi-billion-dollar affordable housing bond program, we are providing focused liquidity, stability and affordability designed to bring sustainable homeownership opportunities to lower-income borrowers across the country. This is also intended to give investors a vehicle to invest in underserved communities,”  said Michael DeVito, CEO of Freddie Mac.

Here are some highlights from the HouseCanary report:

  • Monthly new listing volume was down 10% compared to September 2020
  • In September, there were 287,468 net new listings placed on the market, representing a 14.0% decrease year-over-year
  • For the month of September, there were 352,185 listings that went under contract nationwide, which is a 1.7% decrease year-over-year
  • For the week ending October 1, 2021, the median price of all single-family listings in the U.S. was $383,800, a 7.5% increase year-over-year
  • For the week ending October 1, 2021, the median closed price of single-family listings in the U.S. was $383,878, a13.9% increase year-over-year
  • The median price of all single-family listings in the U.S. is down 0.3% month-over-month and the median price of closed listings has increased by 0.2% month-over-month