Posted on 09/21/2023 11:07:24 AM PDT by Olog-hai
US home sales are headed for the biggest slowdown since 2011, according to Fannie Mae.
The government-sponsored mortgage finance company forecasted total home sales to slump to just 4.8 million this year, marking the slowest sales environment since 2011. That figure will only improve slightly in 2024, with total home sales expected to hit 4.9 million, Fannie Mae economists said.
The slump in sales is partly being influenced by high mortgage rates, with the average rate on the 30-year fixed mortgage rising to 7.18% over the last week, according to Freddie Mac data. That means prospective home buyers are facing the highest cost of borrowing since 2001, which has heavily hindered demand over the past year.
Those dynamics are also taking shape in the backdrop of a weakening US economy, which is poised to enter a slowdown within the first half of next year, Fannie Mae economists predicted.
The Fed has aggressively hiked interest rates over the past year to lower inflation, a move experts have warned could drive the economy into a recession. …
(Excerpt) Read more at markets.businessinsider.com ...
Regards,
But...I thought Bidenomics was the greatest ever, all rainbows and unicorns!
What happened to 2% mortgage rates?! Oh yeah, that was Trump.
It’ll take just one of these large “investors” dumping their properties to get the ball rolling in the down direction on price.
Re: The movie “Margin Call”.
It’s already in a slowdown. Was at a conference last week with a host of supply chain professionals, and this seemed to be the consensus. They are buying less, forecasting less, and the UAW strikes will certainly ripple throughout the supply and impact the Tier 1 and 2 suppliers.
B7ckle up...the government has been disavowing the inevitable for far too long.
B7ckle up...the government has been disavowing the inevitable for far too long.
Excellent post!
I like B7ckle up as well.
LOL...Damn phone keyboards!
From 1.95% to 7.18%... I wonder why it’s tanking?
Bidenomics: high inflation + high interest rates + rising unemployment.
Carter gave the country the misery index.
What do we call this disaster?
Hurrah for lower purchasing costs! For more-affordable housing! (Esp. if you can pay in cash and thus don’t care about mortgage interest rates.)
*****************
The bloat in housing prices is ridiculous.(At least on the West Coast)
Also, about 40% of homes in the USA aren’t carrying a mortgage, which is going to make the market very interesting moving forward.
Banks are stuck getting bled for the 3-4% long term mortgages.
To what, specifically, are you referring?
Regards,
Rates go up and rates go down.
When they were up I was paying probably around 8% on a mortgage, and really did not have a lot of savings. Not good for me.
When they came down I had my home paid for and still not a lot of savings. Still did not work for me.
Now that they finally gone back up I do not have a mortgage but have a lot more savings (thanks Dad). So finally I get some relief from the rate roller coaster. Zero debt and 5% on savings a little more CD’s.
Really just depends on your place in life.
The part they didn’t mention is that prices skyrocketed. In the Charlotte area they increased 66% in two years.
Then interest rates increased from 1% to 7%.
So the same house that would’ve been roughly $300K two years ago is now on the market for about $475K and factoring in interest rates, if you put down 20%, your monthly note on a 30 year mortgage went from about $1500/month to about $3000/month.
A lot of people cannot afford a massive price hike like that. A lot of people who can afford it refuse to pay it because they know its massively overvalued. Until a lot of that massive price increase is given back, sales are going to be abysmal.
Yep. The only thing holding up prices now is that there is no inventory on the market. People don’t want to sell knowing the replacement cost is going to kill them and investors haven’t been willing to bite the bullet and admit they missed the bus.
Sooner or later the sellers always lose this game of chicken. Sometimes it takes a long time though. Eventually though for personal reasons or because they got a job in another city, people have sell. When that happens, prices will collapse quickly.
I get 1-2 offers a week to buy my house. Companies, investment entities, realtors, I have no idea who they are. Of course, they never give a price. Kind of wish I had a 5th wheel that I could live in between now and after the market slide. But I don’t.
The market is still hot in metro Atlanta.
We’re In South Charlotte. Homes in our neighborhood are still generally selling in just a few days...and above asking price. Not all, but most. We’re unloading our house soon. Oooo...take the money and run.
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