The value of a typical American home dropped for the second straight month, down 0.3% from July to August in the largest monthly dip since 2011. Zillow’s latest market report found that affordability is directing market declines, with lower-priced homes staying hotly competitive while expensive markets see drastic declines. The U.S. typical home value is now $356,054. Areas that saw big gains during the pandemic are now susceptible to fast drops, losing their appreciation momentum from the Great Migration. Midwestern markets, which tend to be more affordable, remain hot, while Western markets are comparatively tanking. Volatile mortgage rates are impacting these areas as borrowers find it increasingly hard to even qualify for a loan, let alone house-hunt. “Substantial day-to-day and…
As the housing correction continues, most Americans have a gloomy outlook for the market’s future. A ConsumerAffairs survey found that 78% of Americans expect the housing market to crash and soon. More than half of baby boomers said they believe 2023 will bring a housing crisis. Most Zoomers went so far as to say they’re hoping for one– 84% want a market crash because they believe it will help them buy their first home. Gen Zers overwhelmingly want to own their own homes, with 59% identifying homeownership as a sign of success. But many are worried they may never be able to afford a home if prices continue rising as they have in the last two years. “Non-homeowners cite insufficient…
Zonda’s New Home Pending Sales Index for June 2022 finds the housing market cooling to levels seen in February 2020. The New Home PSI posted a reading of 125.5 for June, down 7.5% YOY and 27.9% below cycle highs. It measures new home orders and average sales rate per community. New home sales dropped month-over-month by 0.2%, the fifth straight month of declines. The new home orders component fell 10.5% YOY, while the average sales rate per community component fell 8.2% YOY. “Home sellers and home buyers are adjusting to a new reality in the housing market,” said Ali Wolf, Zonda’s chief economist. “Home sellers are quickly understanding the days of frenzied demand are behind us and it takes an…
New home purchase applications fell 12% YOY in June, and were down 10% from May, according to the Mortgage Bankers Association’s (MBA) Builder Application Survey. New single-family home sales ran at a seasonally-adjusted annual rate of 620,000 units in June, down 14.7% from May’s pace of 727,000 units. The unadjusted rate was estimated to be 57,000 home sales, down 6.6% from 61,000 in May. New home sales are estimated using mortgage application information and assumptions regarding market coverage and other factors. “Higher mortgage rates and heightened economic uncertainty cooled borrower demand in June, leading to new-home purchase applications declining to the lowest level since April 2020,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Additionally, new…
Housing inventory rebounded in June, rising 2% across the country, according to a new report from Redfin. This is the first annual inventory increase since July 2019. Rising mortgage rates, home price appreciation, and a looming recession have pushed some potential homebuyers to the sidelines. Home sales were down almost 16% YOY, the largest drop since May 2020. “The country’s economic woes have already cooled the housing market, and they’re likely to continue dampening demand,” said Redfin Chief Economist Daryl Fairweather. “The Fed has signaled it may increase interest rates further to combat stubbornly high inflation, which could harm consumer confidence, and lower stock prices mean fewer prospective homebuyers can afford a down payment.” Housing affordability is at its lowest…
By KIMBERLEY HAAS Consumers across the country continue to report difficult homebuying conditions due to inflation, higher mortgage rates, and home price appreciation. Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, says that in April their Home Purchase Sentiment Index fell to its lowest level since the spring of 2020. The percentage of respondents who said it is a good time to buy a home decreased from 24% to 19%, while the percentage who said it is a bad time to buy increased from 73% to 76%. As a result, the net share of those who say it is a good time to buy decreased 8 percentage points month over month, according to the survey. “The current lack…
As affordability declines, the hot housing market is starting to see signs of cooling. In April, 15% of home sellers dropped their asking prices, a 5.9% YOY increase, Redfin reported. The increase is a six-month-high and the largest annual gain on Redfin’s record, which dates back to 2015. But buyers still outnumber sellers, so the market remains competitive and homes priced affordably continue to sell for more than asking. New listings of homes for sale were down 6% YOY and have dwindled since mid-March. The median asking price of newly listed homes rose 16% YOY to $408,458, a new all-time high. So even as more sellers are dropping prices to entice buyers, their returns are still significant. “Homebuyers continue to…
Home sales dropped by 4% last month and 8% YOY, closing out a fast-paced March with signs of a potential cooldown, Redfin reported. Homes sold at their fastest pace ever and for more above list price than any other March in history. The median home-sale price rose 6.2% to $412,700, a record high and the fastest month-over-month gain for this time of year since 2013. But seasonally adjusted home sales fell 4% thanks to severe inventory shortages, rising rates, and accelerating home prices. Seasonally adjusted active listings—the count of all homes that were for sale at any time during the month—fell 13% YOY to an all-time low. “Although pricey coastal markets began showing early signs of a slowdown in late…
Average monthly asking rent in the U.S. leaped to new heights in February, up 15% year-over-year to a record high of $1,901, though mortgage growth outpaced it yet again, according to Redfin. Rent growth saw its largest annual increase since Redfin began tracking rental data in February 2019. Mortgage payments rose 31% YOY to $1,716, also the biggest increase recorded by Redfin. Mortgage payment increases outpaced rent increases in 44 of the 50 largest U.S. metros. “The cost of housing is going up for homebuyers and renters, but it’s going up more quickly for homebuyers,” said Redfin Chief Economist Daryl Fairweather. “That’s because mortgage rates have increased sharply, and will likely continue to do so. When the cost of homeownership…
Demand for vacation homes has cooled down after skyrocketing to near-record levels in January, Redfin reported. February saw second home demand reach its lowest level since May 2020 as mortgage rates continued climbing, only 35% above pre-pandemic levels. Rates declined for a few weeks due to uncertainty surrounding Russia’s invasion of Ukraine, but started inching up again last week, reaching 3.85%. While demand is still significantly elevated from two years ago, it’s nothing compared to January’s 87% increase. February was also the first month where primary residence demand beat out vacation home demand since the pandemic began, though only by 1%. “Rising mortgage rates, combined with rising home prices, are hitting the second-home market much harder than the primary-home market,”…
