[Epoch Times, April 20, 2022](Comprehensive report by Epoch Times reporter Li Ou) As the United Statesmortgage ratesoaring, homebuyers’affordabilityOnce again compressed, early indicators of home-buying activity show some signs of a slowdown.There are many buyers and sellers waiting to see what’s nextreal estateWill the market drop in price? “The market is unlikely to shift from a seller’s market to a buyer’s market anytime soon,” the experts said, based on the latest data.
Early home purchases continued to decline this spring as new listings fell 7% from a year earlier, with an average 30-year fixed termmortgage rateSoaring to 5%, the median asking price climbed to $397,747, resulting in a 35% year-over-year increase in monthly mortgage payments for the typical home buyer to an all-time high of $2,288.
Here are a few early key indicators that tell us the market is softening:
Fewer people are searching for “homes for sale” on Google – searches for the week ending April 9 were down 3% from a year earlier.
The #seasonally adjusted Redfin Home Buyer Demand Index has fallen 3% over the past 4 weeks, compared to a 5% increase a year earlier. The index rose 2% from a year earlier.
#according to residencereal estateProperty showing activity from the first week of January to April 10 was 23 percentage points lower than the same period in 2021, according to data from company ShowingTime.
# Mortgage purchase applications fell 6% in the week ended April 8 from a year earlier, while the seasonally adjusted index rose 1% on a weekly basis.
#In the week ended April 14, the 30-year mortgage rate rose to 5% – the highest level since February 2011. That was up from 4.72% the previous week and was the fastest three-month gain since May 1994.
See more in the video: How U.S. Fixed-Rate Mortgage Soaring Affects Real Estate | Home Buying Sentiment Index Very Pessimistic | Early Signs of Real Estate Cooling |affordabilityProblems | Overheated market may reverse for the first time【American real estateHotspot]Episode 63
The U.S. housing market is turning
“Homebuyer demand is indeed limited, although the market over the past few years has made it seem endless,” said Daryl Fairweather, chief economist at Redfin. “The sharp rise in mortgage rates More homebuyers are being pushed out of the market, but it also appears to be deterring some homeowners from selling. With both supply and demand down, the market is unlikely to shift from a seller’s to a buyer’s market anytime soon.”
Despite these early signs that the market is slowing, it’s still as hot as ever for homebuyers, with home sales speed and price gains setting new records, according to data going back to 2015: 45% of all listings nationwide Find a buyer within a week; homes sold for an average of 2.4% above asking price.
“If a home is on the market for more than a week, people start to wonder why, or think there’s something wrong with it,” says Boston real estate agent James Gulden. “Every offer I’ve written recently has faced multiple offers. , but some finally got fed up with all the competition and pulled out. In a high-pressure bidding war situation, they were increasingly reluctant to make high-risk offers.”
Taking into account higher selling prices and mortgage rates, buying a home is about 30% more expensive today than it was a year ago. This has forced many would-be homebuyers out of the market and put their dreams on hold because the budget can only go so far.
Mortgage applications to buy a home fell 10.1% year over year in the week ended March 25, according to the Mortgage Bankers Association.
Most real estate experts believe that higher mortgage rates will force price growth to slow. While this means the end of double-digit growth, prices will continue to rise — just slightly more slowly. Some even believe that the areas with the highest home price growth in the nation may see prices fall slightly.
“We’ve hit the ceiling in the housing market for some time,” said Mark Zandi, chief economist at Moody’s Analytics, according to Realtor.com.
“The first thing that’s going down is home sales. People just can’t afford it,” he said. “Then we’ll see price growth start to slow. Eventually, I would expect prices to come down in some markets.”
Buyer affordability is the biggest issue
The Federal Reserve Bank of Dallas recently issued a warning that a housing bubble is brewing and that “buying for the ‘fear of missing out’ could drive up home prices and raise expectations for a strong rise in home prices.”
About 26% of people struggled to pay their bills in February this year with instalments in March; nearly half (47%) said they were worried about paying their bills next month, according to the Capital One Marketplace Index. At least one bill. (The index looks at how COVID-19 has affected Americans of different incomes over time.)
That led to nearly two-thirds (62%) saying inflation had affected their spending, according to the index. Some of these could affect the real estate market.
“It’s getting harder and harder for homebuyers to be able to afford the mortgage and all the other costs in the budget,” said Danielle Hale, chief economist at Realtor.com.
High mortgage rates haven’t driven down prices, and prices may even rise, at least initially, as buyers race to lock in properties so they don’t get caught up in higher rates. This can lead them to make bigger offers to win a bidding war, which in turn motivates sellers to raise their prices.
Nationally, the median list price for the week ended March 26 was up 15.3% compared to last year. However, many real estate experts predict that the “party” may be coming to an end.
“We know from history that prices can fall,” Haier noted. “The more important question is whether it will happen immediately. It’s hard to say.”
With mortgage rates much higher, Haier believes housing will have to adjust, though it’s unclear if that means lower prices or just slower price growth.
Mark Zandi believes that in the most overheated real estate markets, prices will slow, or even drop by 5% to 10%.
Zandi also said declines will be seen in the most active areas, such as Boise, ID, Idaho and Phoenix, the Southeast and Florida, and Texas. These are places where locals struggle to buy, especially when they are competing with deep-pocketed investors, Zandi said.
“It’s these markets that have the biggest price increases and we’re going to see the most comeuppance,” Zandi said.
“The middle-class market is likely to be the most affected as middle-class buyers are affected by inflation and rising housing costs,” he added, “as there are not many affordable homes available for sale, the performance of the lower end of the market may be It will be better. So these (low-end) sales are expected to remain active.”#
This article was published in the April 16 issue of Real Estate in San Francisco
Responsible editor: Li Yaoyu