Home prices higher in 90% of metros. Here’s where buyers may find relief.
SIMONE DEL ROSARIO: THE HOUSING MARKET IS FULL OF CONTRADICTIONS.
THESE CONFLICTING HEADLINES SHOW IT ALL.
BUT THAT’S BECAUSE THE HOUSING MARKET ITSELF ISN’T BEHAVING QUITE LIKE WE’D EXPECT.
TAKE THIS NEW DATA OUT THURSDAY FROM THE NATIONAL ASSOCIATION OF REALTORS…SHOWING THAT IN 90% OF METRO MARKETS, HOME PRICES WENT UP IN THE FOURTH QUARTER OF 2022.
THAT’S IN THE FACE OF MORTGAGE RATES MORE THAN DOUBLING IN THE LAST YEAR – PUSHING MONTHLY PAYMENTS OUT OF THE REALM OF AFFORDABILITY FOR MANY – MEANING DEMAND WENT WAY DOWN.
ALCYNNA LLOYD: Because we have a lack of inventory in the U.S., these houses are remaining highly priced, because they’re not as many available for people to purchase, even if demand has fallen.
SIMONE DEL ROSARIO: ACCORDING TO NAR – THE FAMILY INCOME NEEDED TO QUALIFY FOR A MEDIAN PRICED HOME WENT FROM 60 THOUSAND IN DECEMBER 2021 TO 90 THOUSAND IN DECEMBER 2022. THAT’S A 50% INCREASE.
OVER THE SAME TIME, WAGES WENT UP 5%.
WHILE INVENTORY CONTINUES TO STAY STICKY NATIONWIDE – IT’S NOT THE CASE EVERYWHERE. AND THAT’S WHERE BUYERS *COULD FIND RELIEF.
ALCYNNA LLOYD: Some of these hot pandemic boom towns like Phoenix, Boise, those areas are seeing their home prices fall down. And that’s because demand just isn’t there anymore. So while these markets saw a lot of production during the early stages of the pandemic, there just isn’t really enough buyers out there interested.
SIMONE DEL ROSARIO: INTEREST IN THIS ECONOMY IS DIRECTLY RELATED TO INTEREST RATES. FREDDIE MAC ON THURSDAY REPORTED A SLIGHT RISE IN THE 30-YEAR FIXED AT 6.12%… THAT’S STILL NEARLY A FULL POINT LOWER THAN NOVEMBER’S. AND MORTGAGE APPLICATIONS ARE STARTING TO RISE.
ALCYNNA LLOYD: That’s definitely enticing people. Something else to keep in mind is that 6% is not an alarming mortgage rate. If you look back at historical data, I spoke to the analysts this week that said that when he purchased his first home, he paid around 12%. So 6% isn’t such a dramatic climb of mortgage rates. It’s just how fast that happened over the last year.
SIMONE DEL ROSARIO: AND NOW THAT THE SHOCK IS WEARING OFF, PEOPLE APPEAR SLIGHTLY MORE WILLING TO GET INTO THE MARKET. ESPECIALLY WHEN BUILDERS ARE MAKING IT MORE WORTH THEIR WHILE.
ALCYNNA LLOYD: I definitely think that we’ve reached a stage in the market where people are being more realistic about their selling or their buying perspectives. And the market is really trying to get to a point where things go back to normal, people are coming back to Earth.
SIMONE DEL ROSARIO: VISIT STRAIGHT ARROW NEWS DOT COM FOR MORE NEWS ON THE HOUSING MARKET.
I’M SIMONE DEL ROSARIO IN NEW YORK IT’S JUST BUSINESS.