It's Friday desk clearing time for this blogger. "Glenn Kelman -- Redfin's Chief Executive Officer:…
This Post Has 23 Comments
From the first 1:31 video:
Ouch! The WORST Month For Condos in Years!
Danny Greco
Oct 17, 2022 Greater Seattle.
The second 8 minute video:
Condo Flippers Underwater | No More Assignment Sales | Rates will Continue to Go Up
Yasin Nizami
Oct 17, 2022 #gtarealestate #canadianrealestate
In this bite size video, Yasin is covering national housing stats from CREA for month of Sept, LTB delays, US CPI print and how condo flippers are finding themselves cold feet when they are not able to sell it on assignment clause.
The third 4 minute video:
October 2022 Market Update
Mike Misak Tchobanian / Vegas Capital Realty
Oct 18, 2022 Hello, Welcome to my video blog. Today we’re going to be discussing Las Vegas real estate market update for the month of September. Before we begin, I would highly appreciate it. If you like our videos and the information we offer, please click on the subscribe button on YouTube, and also please share this video on your social media and with your friends.
First thing first, the number of homes that’s available for sale. In September, 2022, there was 8,393 houses for sale. Compared to last year, which was only 5,000 houses for sale. Number of inventory jumped year over year by 65% of increase. The number of homes from August of 2022 to September increased by 200 houses only, which is not bad for this time of the year going into the school season. In August, we had 8,199 houses for sale, and in September, as I mentioned, it’s 8,393 houses available for sale.
In September, we closed 1,841 escrows. Those were houses that had accepted offers and they were pending and closed in the month of September. Compared to last year, we had almost double 3,148 houses sold in the month of September. Now, month over month, from August to September, it pretty much stayed the same. We had 1,856 houses sell in August, and in September was 1,841 houses for sale. It’s good because the number plateaued in the sense that the numbers have been steady. With the number of inventory been the same, around 8,000, and the number of sales has been little under 2,000. As of today, we have four and a half months of inventory available. Basically, that’s the absorption rate. If no new homes come on the market for sale, the 8,000 properties that we have, it will take about four and a half months. For it to be sold and in a way that that is still considered at a seller’s market even though the interest rates are very high and we have less buyers. The market is still not bad. It’s actually a good time to buy because the prices went down a lot, and let’s covered that in a little bit in more detail.
The average medium price for Las Vegas is $440,000. Now, just about six, seven months ago, it was much higher than that. It was above $500,000 and for the prices to come down and plateauing for now, this is a good sign if you’re looking to buy. We had a property that sold for $600,000 where another buyer we helped just last week found the same exact kind of property in the same neighborhood for $510,000. Now that house went down 15%. It’s unfortunate for sellers, if you had sold six, seven months ago, you were gonna make more money. However, for buyers out there that are shopping, I would take advantage of the lower prices today, even though you are going to pay more monthly payments. Because in six months, a year, or even in two years, you can refinance and lower your interest rate, therefore lower your payments. You would be better off, saving $90,000 off the price and pay a little bit of higher payment for the next little while until the rates adjust again.
And for sellers out there, the market is still good to sell. Even though unfortunately it would’ve been better seven months ago, you would’ve made more money. However, if you need to sell right now, for whatever reason, it’s still good time to sell. The houses that are selling, they are definitely price, right. Reasonable pricing based on the market. Not price it where it was seven months ago. Two, the home has to be ready to sell, in a sense that first impression when you walk in, everything has to be right. In order for your home to sell over the competition. In general, the market is still good. It is a normal market. We had not crashed as a lot of people were anticipating. Even though it did correct, it went down 10 to 15%, and I believe right after the holidays, the market is gonna pick up again. Fannie Mae already announced that they’re anticipating interest rate to be in the fours by April of next year.
The fourth 8 minute video:
3 Reasons Not To Buy A House Right Now. Misleading Real Estate Ads Breakdown.
Honest real estate talk – Vic Singh
Oct 18, 2022 Thinking of buying a house anytime soon? Please do a lot of research before signing anything. Don’t fall for catchy real estate ads with clever math. These ads are not telling the whole story. Real estate prices have been dropping since April of this year. Bank of Canada said they’re not done yet with the rate hikes. So expect the market to slow down even more.
Unless you’re on a deadline, you should just wait and study the market weekly before jumping into anything.
The last 21 minute video:
Toronto Home Prices Not Far Off From 2018 Levels – Oct 12
Team Sessa Real Estate
Oct 18, 2022
Toronto Real Estate Market Report for the week of Oct 6 – Oct 12, 2022.
Currently, there are about 24,250 apartment units under construction across the Wasatch Front, according to Eskic’s report. Salt Lake City leads the country in rental construction, Eskic wrote. Of the bulk under construction across the Wasatch Front, 13,957 are under construction in Salt Lake County.
The housing market frenzy certainly pressurized rental prices over the past two years, accelerating rental prices to record levels. Eskic has estimated 71% of Utah households had been priced out of the state’s median-priced home by this spring, which crossed the $500,000 mark in February.
“The narrowing path to homeownership has increased the demand for rental housing,” Eskic wrote, noting renters across the Wasatch Front saw as much rental price growth just in the past two years (between 2020 and 2022) as they did in the prior 10 years, between 2010 and 2020.
In Salt Lake County, the average rent grew from $1,213 in early 2020 to $1,534 in the second quarter of 2022, a $321 jump, according to Eskic’s report.
The question is how much will rent price increases slow in a rapidly-growing state like Utah, where rental vacancy rates are low. Will the apartment boom be enough to level out price increases — or even bring prices down?
While the housing market is cooling, don’t expect prices to fall dramatically, says Howard Hanna Real Estate Services CEO, Helen Hanna Casey.
“Now, you have some normalcy, [so] the home prices aren’t going to go up that way,” Hanna Casey said. “They’re not going to fall dramatically in markets like the Lehigh Valley or by the way most of the 13 states we’re in. We are not going to see dramatic drops in prices that we’re predicting right now. We’re going to see a leveling of pricing.”
The question that remains is, will buyers be dissuaded by continuous rate hikes? There are more on the horizon.
The Greater Lehigh Valley Realtors September report found closed sales dipped a little over 15% – to 722 listings – with the mortgage rate around 6%. Inventory remains low. Homes in the region are now selling in 17 days on average, compared to 14 days in August.
“It will take a little longer to sell houses, but it’s not going to take longer than it took five years ago, or four years ago,” Hanna Casey said.
As one national lender joked, “Elvis sightings have more credibility than anything a Realtor says.”
Home sales have dipped for 15 straight months on a year-over-year basis, and it was the second time in the last three months that sales dropped more than 30 percent from the year-ago level. The monthly 2.5 percent sales decrease was worse than the long-run average of 0 percent change recorded between an August and a September in the past 43 years. Sales in all price segments continued to drop by 25 percent or more year-over-year, with the sub-$300k price range falling the most at 36.7 percent. Sales of million-dollar homes fell by double-digits again for the fourth consecutive month, with the high-end market segment dipping 25.6 percent from the same month last year.
“With interest rates rising rapidly since the beginning of the year, buyers and sellers are having difficulties adapting to the market’s new ‘normal,'” said C.A.R. President Otto Catrina, a Bay Area real estate broker and REALTOR®.
How to spot a personal finance poseur: they’re the so-called expert who tells you to do your homework when making big financial decisions, to shop around when choosing products and not to panic when things get rough.
The personal finance expert is the one who should be doing the homework and shopping around. As for people panicking about money, there are no two words more useless to people stressed about their finances than “don’t panic.” Try context and practical suggestions instead.
I saw the “don’t panic” line this week in an e-mail pitch from a PR person to write about one financial expert or another — I can’t recall who because I deleted the e-mail so fast. Then, I invited the people in my Twitter community for their thoughts on the lamest phrases in personal finance. Here are a few of my favourite responses:
Passive income
Side hustle
Stockpicker’s market
The smart money
All your eggs in one basket
People spend more time planning their vacation than their retirement
Save for rainy days
Pivot
Bank of mom and dad
for their thoughts on the lamest phrases in personal finance.
Mine is any phrase with “savvy” in it. As soon as I see “Savvy” my B.S. detector goes on high alert.
“People spend more time planning their vacation than their retirement”
First time I’ve heard that one. 🙂
Buying or selling a home in Corpus Christi is a tricky proposition in this economy
“We are not seeing the craziness and as many multiple-offer situations as we had a year ago,” said real-estate agent Janet Freeman. “Inventory is normalizing, prices are still up a bit, but the inventory is up and the close sales are down probably due to in large part to interest rates.”
Interest rates are now at a 20-year high of over 7 percent for a 30-year fixed-rate mortgage. Guernsey said he had a banker run some numbers for him on the effects of rising mortgage rates since January on a $330,000 home.
“In January — that interest rate if the people maxed out the maximum amount of money they could borrow in January by June — more than 40 percent of them could no longer qualify for the same loan,” he said.
Ontario once again felt the brunt of home price declines, followed to a lesser extent by British Columbia, CREA noted. It also noted that prices are “sliding sideways” in Prairie cities like Calgary, Regina and Edmonton, while price softness in the Atlantic region is now showing in parts of New Brunswick and Newfoundland and Labrador.
Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $523,479.
What was once a booming seller’s market has turned course as buyers beset by historic interest rates are waiting longer and paying less, according to the latest market update from the Colorado Association of Realtors. As a result, there are more available homes than there have been in two years.
Report: Denver-area housing market cooling quickly
Most of Denver’s housing market measurements have cooled back to levels not seen since before the pandemic or in its early months.
Denver home foreclosures are rising for the first time in two years, according to the county assessor’s office. This shows a reversal in the last two years of white-hot housing markets, but not a crash.
There have been 398 new foreclosure filings through September this year. With another three months left, this year’s foreclosures have risen 255% from 2021.
Homebuilder confidence plunged for the 10th consecutive month in October, falling to its lowest level since 2012, according to the National Association of Home Builders’ monthly survey. The latest downtick came as mortgage rates spiked to levels not seen since the Great Recession.
The survey’s results were “disastrous” and indicated there is “no bottom yet” for the housing market’s current slump, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“The plunge in the NAHB index makes it clear that the reported jump in new home sales in September was much more noise than signal,” Shepherdson said in a note to clients. “In short, housing is in free fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go.”
Shepherdson added that Pantheon has “no faith at all that mortgage applications have stopped falling” following weeks of declining application volume in response to rising mortgage rates. Ongoing increases in long-term rates will likely cause home sales to fall through early next year “at least,” he added.
In a more and more expensive market, hope comes in Grafton, where the drop in median price to $422,500 for 18 single-family homes was a striking figure from the $560,000 price for 16 units during September 2021.
The change butted heads with the upward year-to-date trend of going up to $550,000 from $500,000 during the same time last year.
The National Association of Homebuilders (NAHB) has only been publishing builder confidence numbers since the mid 1980s. It’s possible–if not likely–that the late 70s and early 80s would be worse than the present in terms of volatility. But even if we forget the fact that today’s number represents the biggest year-over-year drop on record, the housing market is still obviously in distress.
Aren’t mortgage rates not far off from 2002 levels? Prices will have to retrace a lot more to restore equilibrium between home prices, wages, and interest rates.
CNN/Money
Mortgage rates hit historic lows
Freddie Mac says 30-year rate plummets to 5.93%, the lowest level since 1965.
December 26, 2002: 7:07 PM EST
NEW YORK (CNN/Money) – Mortgage rates will enter the new year at historic lows, as concerns about a war with Iraq and rising tensions over North Korea’s nuclear program kept pressure on borrowing rates.
Freddie Mac reported Thursday that the 30-year mortgage rate averaged 5.93 percent, with an average of 0.6 of a point payable up front to the lender, in the week ending Dec. 27. The last time the 30-year hit this level was in 1965, according to the firm.
The 30-year rate fell from an average 6.03 percent last week and remained below its 7.16 percent average of a year ago.
The 15-year fixed-rate mortgage averaged a 5.32 percent interest rate, down from 5.42 percent last week and down from 6.65 percent last year. The 15-year level matches the lowest rate ever recorded, which was also hit in November of this year.
The 15-year mortgage averaged 0.6 of a point payable up front to the lender.
One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, averaged 4.01 percent. The one-year ARM slipped from 4.07 percent last week and averaged 0.6 of a point payable up front. A year ago, the one-year ARM averaged 5.25 percent. The one-year ARM fell to the lowest level since Freddie Mac began tracking it in 1984.
… https://money.cnn.com/2002/12/26/pf/yourhome/q_weekly_rates/index.htm
That article is from the day after Christmas in 2002. It implies:
1) The current 30 year mortgage rate over 7.2% was above the average level in 2001.
2) The last time before 2002 that rates were lower than December 2002 levels was 1965, just before inflation ran amok the way it is currently.
3) You might have to wait for decades or even centuries to see mortgage rates return to pandemic levels.
4) People who bought during the pandemic price spike really got stucco.
I bought a house in July of 2003. got a no points, no origination fee, 5.125 (5 and a 1/8th) 30 year fixed mortgage. Thought that was a heck of a deal. Paid 292k for the house after some hard bargaining back and forth. Put about 100k into it over the next few years (added master suite). Lived there 18 years. Sold it in 2020 for 700,000. Yes that’s completely ridiculous.
But now a new buyer’s loan is going to be a lot more than my 5.125 loan how the heck are they going to paying 7% on 700,000?????? That house price has to fall 40 to 50% from there at 7% to even get close to being affordable.
From the first 1:31 video:
Ouch! The WORST Month For Condos in Years!
Danny Greco
Oct 17, 2022 Greater Seattle.
The second 8 minute video:
Condo Flippers Underwater | No More Assignment Sales | Rates will Continue to Go Up
Yasin Nizami
Oct 17, 2022 #gtarealestate #canadianrealestate
In this bite size video, Yasin is covering national housing stats from CREA for month of Sept, LTB delays, US CPI print and how condo flippers are finding themselves cold feet when they are not able to sell it on assignment clause.
The third 4 minute video:
October 2022 Market Update
Mike Misak Tchobanian / Vegas Capital Realty
Oct 18, 2022 Hello, Welcome to my video blog. Today we’re going to be discussing Las Vegas real estate market update for the month of September. Before we begin, I would highly appreciate it. If you like our videos and the information we offer, please click on the subscribe button on YouTube, and also please share this video on your social media and with your friends.
First thing first, the number of homes that’s available for sale. In September, 2022, there was 8,393 houses for sale. Compared to last year, which was only 5,000 houses for sale. Number of inventory jumped year over year by 65% of increase. The number of homes from August of 2022 to September increased by 200 houses only, which is not bad for this time of the year going into the school season. In August, we had 8,199 houses for sale, and in September, as I mentioned, it’s 8,393 houses available for sale.
In September, we closed 1,841 escrows. Those were houses that had accepted offers and they were pending and closed in the month of September. Compared to last year, we had almost double 3,148 houses sold in the month of September. Now, month over month, from August to September, it pretty much stayed the same. We had 1,856 houses sell in August, and in September was 1,841 houses for sale. It’s good because the number plateaued in the sense that the numbers have been steady. With the number of inventory been the same, around 8,000, and the number of sales has been little under 2,000. As of today, we have four and a half months of inventory available. Basically, that’s the absorption rate. If no new homes come on the market for sale, the 8,000 properties that we have, it will take about four and a half months. For it to be sold and in a way that that is still considered at a seller’s market even though the interest rates are very high and we have less buyers. The market is still not bad. It’s actually a good time to buy because the prices went down a lot, and let’s covered that in a little bit in more detail.
The average medium price for Las Vegas is $440,000. Now, just about six, seven months ago, it was much higher than that. It was above $500,000 and for the prices to come down and plateauing for now, this is a good sign if you’re looking to buy. We had a property that sold for $600,000 where another buyer we helped just last week found the same exact kind of property in the same neighborhood for $510,000. Now that house went down 15%. It’s unfortunate for sellers, if you had sold six, seven months ago, you were gonna make more money. However, for buyers out there that are shopping, I would take advantage of the lower prices today, even though you are going to pay more monthly payments. Because in six months, a year, or even in two years, you can refinance and lower your interest rate, therefore lower your payments. You would be better off, saving $90,000 off the price and pay a little bit of higher payment for the next little while until the rates adjust again.
And for sellers out there, the market is still good to sell. Even though unfortunately it would’ve been better seven months ago, you would’ve made more money. However, if you need to sell right now, for whatever reason, it’s still good time to sell. The houses that are selling, they are definitely price, right. Reasonable pricing based on the market. Not price it where it was seven months ago. Two, the home has to be ready to sell, in a sense that first impression when you walk in, everything has to be right. In order for your home to sell over the competition. In general, the market is still good. It is a normal market. We had not crashed as a lot of people were anticipating. Even though it did correct, it went down 10 to 15%, and I believe right after the holidays, the market is gonna pick up again. Fannie Mae already announced that they’re anticipating interest rate to be in the fours by April of next year.
The fourth 8 minute video:
3 Reasons Not To Buy A House Right Now. Misleading Real Estate Ads Breakdown.
Honest real estate talk – Vic Singh
Oct 18, 2022 Thinking of buying a house anytime soon? Please do a lot of research before signing anything. Don’t fall for catchy real estate ads with clever math. These ads are not telling the whole story. Real estate prices have been dropping since April of this year. Bank of Canada said they’re not done yet with the rate hikes. So expect the market to slow down even more.
Unless you’re on a deadline, you should just wait and study the market weekly before jumping into anything.
The last 21 minute video:
Toronto Home Prices Not Far Off From 2018 Levels – Oct 12
Team Sessa Real Estate
Oct 18, 2022
Toronto Real Estate Market Report for the week of Oct 6 – Oct 12, 2022.
Currently, there are about 24,250 apartment units under construction across the Wasatch Front, according to Eskic’s report. Salt Lake City leads the country in rental construction, Eskic wrote. Of the bulk under construction across the Wasatch Front, 13,957 are under construction in Salt Lake County.
The housing market frenzy certainly pressurized rental prices over the past two years, accelerating rental prices to record levels. Eskic has estimated 71% of Utah households had been priced out of the state’s median-priced home by this spring, which crossed the $500,000 mark in February.
“The narrowing path to homeownership has increased the demand for rental housing,” Eskic wrote, noting renters across the Wasatch Front saw as much rental price growth just in the past two years (between 2020 and 2022) as they did in the prior 10 years, between 2010 and 2020.
In Salt Lake County, the average rent grew from $1,213 in early 2020 to $1,534 in the second quarter of 2022, a $321 jump, according to Eskic’s report.
The question is how much will rent price increases slow in a rapidly-growing state like Utah, where rental vacancy rates are low. Will the apartment boom be enough to level out price increases — or even bring prices down?
https://www.msn.com/en-us/money/realestate/rents-are-still-going-up-e2-80-94-but-at-half-the-rate-they-were-6-months-ago/ar-AA136ZgL
Credit Suisse Default Swaps Surpass 2008 Crisis Level; Firm To Sell U.S. Asset Management Arm
https://thedeepdive.ca/credit-suisse-default-swaps-surpass-2008-crisis-level-firm-to-sell-u-s-asset-management-arm/
While the housing market is cooling, don’t expect prices to fall dramatically, says Howard Hanna Real Estate Services CEO, Helen Hanna Casey.
“Now, you have some normalcy, [so] the home prices aren’t going to go up that way,” Hanna Casey said. “They’re not going to fall dramatically in markets like the Lehigh Valley or by the way most of the 13 states we’re in. We are not going to see dramatic drops in prices that we’re predicting right now. We’re going to see a leveling of pricing.”
The question that remains is, will buyers be dissuaded by continuous rate hikes? There are more on the horizon.
The Greater Lehigh Valley Realtors September report found closed sales dipped a little over 15% – to 722 listings – with the mortgage rate around 6%. Inventory remains low. Homes in the region are now selling in 17 days on average, compared to 14 days in August.
“It will take a little longer to sell houses, but it’s not going to take longer than it took five years ago, or four years ago,” Hanna Casey said.
https://www.wfmz.com/news/area/lehighvalley/expect-home-prices-to-stabilize-not-fall-says-howard-hanna-ceo/article_a3d4dc8e-4f29-11ed-9105-7fba081a6965.html
Good morning Howie….
Schnecksville, PA Housing Prices Crater 19% YOY As Lehigh Valley Housing Prices Post Double Digit Declines
https://www.movoto.com/schnecksville-pa/market-trends/
I suspect Hanna Casey is a lion.
Orange, CA Housing Prices Crater 26% YOY As Southern California Housing Prices Slip Under 2018 Level
https://www.movoto.com/ca/92866/market-trends/
As one national lender joked, “Elvis sightings have more credibility than anything a Realtor says.”
Home sales have dipped for 15 straight months on a year-over-year basis, and it was the second time in the last three months that sales dropped more than 30 percent from the year-ago level. The monthly 2.5 percent sales decrease was worse than the long-run average of 0 percent change recorded between an August and a September in the past 43 years. Sales in all price segments continued to drop by 25 percent or more year-over-year, with the sub-$300k price range falling the most at 36.7 percent. Sales of million-dollar homes fell by double-digits again for the fourth consecutive month, with the high-end market segment dipping 25.6 percent from the same month last year.
“With interest rates rising rapidly since the beginning of the year, buyers and sellers are having difficulties adapting to the market’s new ‘normal,'” said C.A.R. President Otto Catrina, a Bay Area real estate broker and REALTOR®.
https://au.lifestyle.yahoo.com/rising-interest-rates-depress-september-155800620.html
How to spot a personal finance poseur: they’re the so-called expert who tells you to do your homework when making big financial decisions, to shop around when choosing products and not to panic when things get rough.
The personal finance expert is the one who should be doing the homework and shopping around. As for people panicking about money, there are no two words more useless to people stressed about their finances than “don’t panic.” Try context and practical suggestions instead.
I saw the “don’t panic” line this week in an e-mail pitch from a PR person to write about one financial expert or another — I can’t recall who because I deleted the e-mail so fast. Then, I invited the people in my Twitter community for their thoughts on the lamest phrases in personal finance. Here are a few of my favourite responses:
Passive income
Side hustle
Stockpicker’s market
The smart money
All your eggs in one basket
People spend more time planning their vacation than their retirement
Save for rainy days
Pivot
Bank of mom and dad
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-personal-finance-cliches/
Directly from my skull to your blog
for their thoughts on the lamest phrases in personal finance.
Mine is any phrase with “savvy” in it. As soon as I see “Savvy” my B.S. detector goes on high alert.
“People spend more time planning their vacation than their retirement”
First time I’ve heard that one. 🙂
Buying or selling a home in Corpus Christi is a tricky proposition in this economy
“We are not seeing the craziness and as many multiple-offer situations as we had a year ago,” said real-estate agent Janet Freeman. “Inventory is normalizing, prices are still up a bit, but the inventory is up and the close sales are down probably due to in large part to interest rates.”
Interest rates are now at a 20-year high of over 7 percent for a 30-year fixed-rate mortgage. Guernsey said he had a banker run some numbers for him on the effects of rising mortgage rates since January on a $330,000 home.
“In January — that interest rate if the people maxed out the maximum amount of money they could borrow in January by June — more than 40 percent of them could no longer qualify for the same loan,” he said.
https://www.msn.com/en-us/money/realestate/buying-or-selling-a-home-in-corpus-christi-is-a-tricky-proposition-in-this-economy/ar-AA137jrU
Ontario once again felt the brunt of home price declines, followed to a lesser extent by British Columbia, CREA noted. It also noted that prices are “sliding sideways” in Prairie cities like Calgary, Regina and Edmonton, while price softness in the Atlantic region is now showing in parts of New Brunswick and Newfoundland and Labrador.
Removing the high-priced markets of the Greater Toronto and Vancouver areas, the average price stands at $523,479.
https://www.canadianmortgagetrends.com/2022/10/september-housing-data-suggests-downturn-has-longer-to-run/
What was once a booming seller’s market has turned course as buyers beset by historic interest rates are waiting longer and paying less, according to the latest market update from the Colorado Association of Realtors. As a result, there are more available homes than there have been in two years.
Report: Denver-area housing market cooling quickly
Most of Denver’s housing market measurements have cooled back to levels not seen since before the pandemic or in its early months.
Denver home foreclosures are rising for the first time in two years, according to the county assessor’s office. This shows a reversal in the last two years of white-hot housing markets, but not a crash.
There have been 398 new foreclosure filings through September this year. With another three months left, this year’s foreclosures have risen 255% from 2021.
https://www.msn.com/en-us/money/realestate/denver-foreclosures-jump-after-10-year-decline/ar-AA136dC1
Homebuilder confidence plunged for the 10th consecutive month in October, falling to its lowest level since 2012, according to the National Association of Home Builders’ monthly survey. The latest downtick came as mortgage rates spiked to levels not seen since the Great Recession.
The survey’s results were “disastrous” and indicated there is “no bottom yet” for the housing market’s current slump, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
“The plunge in the NAHB index makes it clear that the reported jump in new home sales in September was much more noise than signal,” Shepherdson said in a note to clients. “In short, housing is in free fall. So far, most of the hit is in sales volumes, but prices are now falling too, and they have a long way to go.”
Shepherdson added that Pantheon has “no faith at all that mortgage applications have stopped falling” following weeks of declining application volume in response to rising mortgage rates. Ongoing increases in long-term rates will likely cause home sales to fall through early next year “at least,” he added.
https://nypost.com/2022/10/18/us-housing-market-in-free-fall-as-builder-confidence-suffers-disastrous-drop-economist/
In a more and more expensive market, hope comes in Grafton, where the drop in median price to $422,500 for 18 single-family homes was a striking figure from the $560,000 price for 16 units during September 2021.
The change butted heads with the upward year-to-date trend of going up to $550,000 from $500,000 during the same time last year.
https://www.msn.com/en-us/money/realestate/real-estate-condo-sales-hold-steady-in-worcester-county/ar-AA136Bni
The National Association of Homebuilders (NAHB) has only been publishing builder confidence numbers since the mid 1980s. It’s possible–if not likely–that the late 70s and early 80s would be worse than the present in terms of volatility. But even if we forget the fact that today’s number represents the biggest year-over-year drop on record, the housing market is still obviously in distress.
https://www.mortgagenewsdaily.com/news/10182022-builder-confidence-nahb-hmi
“Prices Not Far Off From 2018 Levels”
Aren’t mortgage rates not far off from 2002 levels? Prices will have to retrace a lot more to restore equilibrium between home prices, wages, and interest rates.
CNN/Money
Mortgage rates hit historic lows
Freddie Mac says 30-year rate plummets to 5.93%, the lowest level since 1965.
December 26, 2002: 7:07 PM EST
NEW YORK (CNN/Money) – Mortgage rates will enter the new year at historic lows, as concerns about a war with Iraq and rising tensions over North Korea’s nuclear program kept pressure on borrowing rates.
Freddie Mac reported Thursday that the 30-year mortgage rate averaged 5.93 percent, with an average of 0.6 of a point payable up front to the lender, in the week ending Dec. 27. The last time the 30-year hit this level was in 1965, according to the firm.
The 30-year rate fell from an average 6.03 percent last week and remained below its 7.16 percent average of a year ago.
The 15-year fixed-rate mortgage averaged a 5.32 percent interest rate, down from 5.42 percent last week and down from 6.65 percent last year. The 15-year level matches the lowest rate ever recorded, which was also hit in November of this year.
The 15-year mortgage averaged 0.6 of a point payable up front to the lender.
One-year adjustable-rate mortgages (ARMs), loosely indexed to the 10-year Treasury note, averaged 4.01 percent. The one-year ARM slipped from 4.07 percent last week and averaged 0.6 of a point payable up front. A year ago, the one-year ARM averaged 5.25 percent. The one-year ARM fell to the lowest level since Freddie Mac began tracking it in 1984.
…
https://money.cnn.com/2002/12/26/pf/yourhome/q_weekly_rates/index.htm
That article is from the day after Christmas in 2002. It implies:
1) The current 30 year mortgage rate over 7.2% was above the average level in 2001.
2) The last time before 2002 that rates were lower than December 2002 levels was 1965, just before inflation ran amok the way it is currently.
3) You might have to wait for decades or even centuries to see mortgage rates return to pandemic levels.
4) People who bought during the pandemic price spike really got stucco.
I bought a house in July of 2003. got a no points, no origination fee, 5.125 (5 and a 1/8th) 30 year fixed mortgage. Thought that was a heck of a deal. Paid 292k for the house after some hard bargaining back and forth. Put about 100k into it over the next few years (added master suite). Lived there 18 years. Sold it in 2020 for 700,000. Yes that’s completely ridiculous.
But now a new buyer’s loan is going to be a lot more than my 5.125 loan how the heck are they going to paying 7% on 700,000?????? That house price has to fall 40 to 50% from there at 7% to even get close to being affordable.
The wonders of appraisal fraud.