For Real Estate Market Updates in September , mortgages rates rose higher before the release of the highly anticipated CPI report. Economists and politicians shall expect another aggressive hike that the Fed will take to continue to fight against inflation. As of now, our 30-year fixed-rate mortgage has climbed 3 points higher than a year ago, which affected the number of mortgage applications for purchase even more (let’s not talk about refinance!) as housing affordability continued to become more difficult.
The pullback in housing demand has also resulted in sellers cutting down their asking price as their homes sit on the market longer. Nearly half of all for-sale properties, in fact, have seen a price reduction according to the latest weekly data from MLS’s.
interest rate updates
By the time of this article, we officially reached 6% benchmark, the highest since 2008, with the Fed’s plan to implement more aggressive monetary policy to keep high inflation under control.
Mortgage purchase applications decreased 1% on the weekly basis and is down by 23% exactly a year ago. With the direction of the interest going, the volume for both purchase and refinance loans will continue to decline even more as we’re entering Fall and Winter, the slow season of the year, which means housing demand will remain low for quite a while. Hopefully there will be more negative news on the interest rate in the upcoming Market Updates series.
To learn more about how interest rate really affects home buyer’s affordability over the past decades, you can read more here.
Real estate sales report
The housing market continues to come back to a much more normal pace given the sales activities finally dip below last year’s level. The average DOM (Days on Market) is now 24 days (comparing to 12 days a year ago) and the frequency of lower price adjustment increases. Good for us (kinda), the open-escrow activities still remain the same month-to-month within the past couple months so we can expect a less pessimistic outlook within the next couple months.
market supply & demand report
With the demand on the declining trend, inventory continues to stay high and was up by a significant amount comparing to the past couple years. However, some home owners still do not plan to exit-selling simply because of the loss in potential profit. Can’t really blame them given how much equity sellers from last year profited! As of now, as the future of the housing market remains unclear and uncertain, both sellers and buyers choose to hold off on their courses of actions rather than rushing to make a decision.
To learn more about if leasing is still worse than buying, you can read more about it here.
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