These are tough times for the housing market. A lack of inventory and high mortgage rates have combined to rob homeowners of the incentive to sell their houses at near-record prices while would-be buyers are scared off by sticker shock and the prospect of paying off the loan.
– On Thursday, Freddie Mac’s weekly mortgage report found that even though rates on a 30-year loan ticked down a notch to 7.12%, it was still the fourth consecutive week of 7% or higher rates. Meanwhile on Wednesday, the Mortgage Bankers Association said mortgage applications have plunged 28% since last year and are now at the lowest level since late 1996.
– The National Association of Home Builders said last month that its August survey of builder sentiment had fallen 6 points to 50 out of 100 following seven months of rising confidence levels. The index measuring traffic of prospective buyers also fell 6 points to 34.
– Existing home sales in July fell 2.2% to an annual level of 4.07 million. A year ago, sales were running at a 4.88 million clip. Although pending sales rose slightly in the same month, they are still off 14% from 2022.
Housing enjoyed a record spell as the nation dealt with the coronavirus pandemic. Remote work policies and massive stimulus from Washington, coupled with extremely low mortgage rates, encouraged many people to move and buy homes. That, in turn lifted prices – especially in some of the large coastal cities, allowing homeowners to trade into larger and more…
