Posted on 04/05/2023 4:50:04 AM PDT by Kaiser8408a
My friend Phill Hall asked me about the state of the US housing market yesterday. My answer? “Chaos.” Why chaos? Here is why: 23 consecutive months of NEGATIVE real wage growth, declining availability of homes for sale, still expensive home prices following the Covid spending surge, and rising mortgage rates as The Fed fights inflation.
And now we have mortgage demand shrinking 4.1% from the previous week according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 31, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 59 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 35 percent lower than the same week one year ago.
Throw in the declining inventory of homes for sales, and we have chaos.
Not to mention 23 consecutive months of negative REAL wage growth.
Well, at least REAL home prices are growing more slowly (-3.86% YoY) than REAL weekly wage growth -1.9% YoY). So much for housing as a hedge against inflation!
But it’s transitory! /sarc
(Excerpt) Read more at confoundedinterest.net ...
The aversion American voter seems to love Biden’s Economy.
The Mortgage Demand metric is 6 months behind the place the deposit on a house and select the slate for the entry way. Home price growth seems to be 6-9 weeks behind facts on the ground.
I stated back in 2022, there will be a home in a very hot market, that was priced just a bit to high, that will sell at at a 70% discount to its top listing after being on the market for 3 years. The sellers will have blown 50% of the sale price on being to cute by half. I am looking for that one listing nationwide, it will be at the beach, with insurance crisis it will be in florida and have great schools. A 700k house is now out of reach of 30 somethings, so great schools are no longer an adder at the high end. At that point the rest of the market will have reached 2017 pricing and both the buyer and seller will be willing participants in the exchange of keys and the banks will be back to confidence in repossession enough to issue non predatory 30 year notes.
How the heck did “average” change to “aversion”?
Hard for prices to fall too much, when buyers with cash are hedge funds, foreigners, sovereign wealth funds, investors, and just wealthy. Gen x,y,a etc get to compete with all of them.
Just closed on selling house last week.
House went on Market last week in Feb.
Offered was made in 1st 6 days.
The buyer offered $25k over asking price.
Bought house in ‘18 for $450k sold for $610k.
In Maryland...
Bubble will pop soon...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.