Posted on 05/19/2022 9:47:40 AM PDT by Browns Ultra Fan
US Existing Home Sales were 5.61M SAAR in April, down -2.4% from March’s -3.0% MoM reading. But median prices YoY for existing home sales printed at 14.85%, still hot, hot, hot.
With 3 consecutive declines in MoM existing home sales, how can prices still be raging at 14.85%? First, inventory for sale in April remains low compared to 2010 (yellow line). Second, The Federal Reserve’s Stimulypto (excessive monetary easing) is still out there in force despite Jerome “Slowhand” Powell signaling rate increases (green line). 30Y mortgage rates are still rising.
Where do we go from here? 30 year mortgage rates have been climbing as The Fed signals its intents to tighten monetary policy. But with global economic slowing, Treasury yields have been coming down (like today’s -5.2 BPS drop (Germany’s 10Y Bund Yield dropped -8 BPS on slowing global economic growth).
But remember, the Existing Home Sales numbers are for April.
(Excerpt) Read more at confoundedinterest.net ...
Not for long. This always lags realities that are just now setting in.
Sales are down because there’s fewer and fewer homes on the market....that’s why prices are up.
At least those with their eyes open can easily see this one coming. And it will be historic.
What type of idiot calls no inventory, slow sales and stratosphere pricing a “hot” market?
Yep. Same pressures still exist.
And not to be a broken record on this, but people don’t buy a price. They buy a monthly payment. Significantly higher interest rates are pricing many people out. We are also seeing a surge in ARM loans again. That is poison to the buyer.
And finally, I doubt seriously that anyone is refinancing now.
Homes in my hood sell immediately 30-50K over selling price with NO inspections allowed. My niece gave up and decided to build her own.
Cue Buster Poindexter
I don’t know how this falls into the data but we’ve noticed some things here in the Knoxville area.
The area MLS database is interesting. When we were house hunting in 2009-2010, the total number of available properties before applying any filters was over 22,000. A year ago the number got down to a little over 7,000 and sales were hot. Now it’s over 10,000 available.
Still, most homes within our query range go pending within a week, and some within a weekend.
Rarely, there will be a “price reduction”, but it does happen.
It seems that sales are hot while inventory continues to increase. Inquiring minds want to know...
Let’s hope it lasts another month. Putting our townhome on the market in a few weeks. It will be the ONLY one under $400k in our zip code that’s not under contract.
This will not last much longer. The housing market will replay 2008, only much worse . Just add to pile of disasters going on right now. All man made contingencies!!!
Prices remain high because of supply issues. People can’t afford to move to a new home so they keep their current one. Further, there is a trend in hotter real estate markets for private equity to buy residential homes and rent them out. Interest rates are very low and there is a surplus of tenants. If prices rise, the landlord refinances the house, doing an equity takeout of tax-free money and uses it to buy more inventory.
It’s going to take 10%+ 30 year mortgages to fix this.
And 18% car loans.
adjustment coming...
A friend buying a house decided to hold off. A couple weeks later, the price of the house dropped 20K.
I keep getting calls about it. My current mortgage is 3.25% - they are asking 5.5% refi for what? To get some of that extra money out of my equity so I can spend it, have a much higher monthly payment and then be underwater when everything collapses? Nope.
“Great affordable housing policy out of DC!! “
It will definitely make houses cheaper in the mid term.
Bingo
Here in the Silicon Valley area, if you bought a house 40 years ago, the amount paid over asking today is three to four times what you paid for the house. Read that carefully. I’m not saying the house is selling for three to four times what you paid for it. The amount paid OVER ASKING is three to four times what you paid for it.
This is sheer lunacy.
Three of the four homes in my cul-de-sac all sold within days of being listed. The same holds true for the general area.
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