Posted on 03/25/2022 7:21:35 AM PDT by Browns Ultra Fan
US pending home sales for February surprised to the downside, down -4.1% MoM and -5.4% YoY, as mortgage rates soar.
And inventory remains MIA.
Not surprisingly, March median sales prices are up 17% YoY.
Let’s see if The Fed will continues its plans to raise rates and trim their balance sheet. Or will Powell be “Runaround Jay.”
(Excerpt) Read more at confoundedinterest.net ...
Inventory is short in Atlanta. Homes in our neighborhood still selling in 1-2 days in bidding wars.
Mortgage Rates are still extremely low 3-4%, historically with the level of inflation we have now, mortgage rates should be 8-10% or more.
My first mortgage in 1984 was 11.15%
If we return to historically normal interest rates, the housing market will crater.
Interest rates are rising. Sales are declining.
Prices will have to start declining soon.
I was having this discussion with someone here yesterday who just didn’t get it. Prices can’t keep going up. Demand is not inelastic. People will not/can not buy if prices get too high.
And of course our wide open border greatly exacerbates the housing supply / demand problem. Millions of aliens have been ushered in just in the last year, without any increase in housing supply. Exactly what BlackRock wants, not surprisingly.
Close the borders, deport all illegals, stop printing money, drill baby drill for energy independence, and raise interest / mortgage rates to 10%.
prices up around 20% and Rages up a point and a half... duh..
As rates go higher and higher, watch the prices start to collapse....
AZ is horrible for buyers still. Too many people trying to get out of Dodge (Cali) while they still can.
Crazy here too. House listed on a Friday and in contract the following Monday. House just sold 18 months ago and now appears to have increased by $100K+ in that time. THAT is the definition of insanity.
We just sold Moms house just across the street from us for $110,000 more than it appraised for 2 years ago. Soon we are selling ours and moving to the mountains. Every month our house increases in value. No new houses in our price range are being built.
same here in DC area... listings are under contract within 5 days, usually with escalation clauses
Few remember that time.
I was out of work for 4 years.
There was a line around the building to work at Target.
I know it is obvious to you, but to some it is not. The affordability of a home is essentially the monthly payment. The higher the interest rate, the lower the price of the house needs to be for the person to stay within the monthly budget/mortgage approval amount. a 1% increase in the interest rate on a $300k 30 year fixed mortgage is about a $180 increase in the monthly payment.
houses on the front range of colorado are selling BEFORE they’re even listed: someone knows someone who’s getting ready to sell, and BOOM it’s sold!
When they have guys “riding shotgun” on delivery trucks full of lumber you know it’s outrageously expensive...
It’s peculiar how an inflation premium is missing from current interest rates.
I’ve seen some argue in the past that our oddly low rates have been a consequence of China’s willingness to buy Treasuries without regard to the yield.
Anyone who watched the Bond Vigilantes jerk the 1970’s Fed around is aware that bond buyers can wield more power than the Fed if they decide to act in concert.
Wall Street QE money is buying up single family homes and that is propping up the market.
BlackRock, Invitation Homes, and a few other investment funds that have been buying up SFHs and turning neighborhoods into rentals may be fronting for China.
If so it explains the above market full cash offers that have been driving the SoCal market. These buys make no sense using conventional metrics.
The effect doesn’t confine itself to California. Cash flush Californians move to other states driving up those markets.
“Wall Street QE money is buying up single family homes and that is propping up the market.”
Wall Street is definitely part of this. I don’t think it’s QE money though.
Wall Street buying up swaths of SFHs and turning them into rentals is something entirely new, and IMO not a good thing.
Too much cash sloshing around? Weird.
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