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 ...
It will slow down when rates hit 16%. That was what I paid back in early 1980 for my first home.
I have never seen rates so low as the past few years. People are spoiled.
Of course homes back in the early 80’s were not quite as expensive but wages were not as high either.
I sold my house (3 blocks from Apple HQ) in April. Waiting for the current bubble to burst before I buy more property (this time in TX). I give it till end of summer.
I think home prices in places like CA, will decline, as they have been ultra bloated and inflated for many years. While other states that have been approaching CA prices for the past few years, will be much less affected.
That is not what happened in the previous housing crash in 2010-11. Every state had significant price declines.
Everyone knows CA home prices have been ridiculously inflated/bloated for decades. A better/newer home in Texas, AZ, or Oregon will run you about 550k. Which of these two will be the most affected in an big economic shakeup? I'd bet the least expensive will fare much better in this scenario.
Yes, because price drops are usually percentage based.
a 750K house will drop more in dollar numbers than a 550k house.
My only point was, almost all areas will be affected when housing bubbles burst.
They all will, I agree, but in the land of super bloated home prices like CA, I think they’ll be the most dramatically affected as opposed to other states where prices are much more reasonable. I could be wrong, but we’ll see.
for sure. Just same as over-valued stocks drop more than value stocks during bear market.
Just think about selling and moving (if desired) to another state with that money. You could live off the sale of the home forever. Wouldn’t that be nice!
Loans are getting hard to come by. Even with 50% down, some lenders are not qualifying buyers.
Inventory in our area is extremely low. Prices still escalating. We sold Mom’s house across the street in January and now it looks like ours will go for about $20,000 more.
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