House prices are skyrocketing and mortgage rates are exploding. Is there any good news for future home buyers?
Believe it or not, the answer is yes. Housing inventories are on the rise, rising 18.7% annualized in June, according to real estate Realtor.com service company. This is a record for Realtor.com data dating back to 2017. It was the second consecutive monthly increase.
“This inventory rally is driven by both sellers entering the market and moderating demand,” Realtor.com economists Sabrina Speianu and Danielle Hale wrote in a commentary.
“Newly listed homes entered the market at a higher rate (up 4.5% year over year) than in the recent past,” they said.
Meanwhile, “moderate demand took a bigger toll this month, with pending listings declining significantly (down 16.3%) from a year ago,” they said.
“Nevertheless, homes are still spending less time on the market than a year ago and prices continue to rise, in part due to an increase in large, newly listed homes and slow adjustments to consumer expectations. sellers.”
Bigger houses: an “opportunity”
These larger homes represent “opportunities for relocating buyers because newly listed homes are larger,” Hale said. “This first wave of supply enhancements may be especially timely for summer sellers looking to upgrade their first home.”
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Looking ahead, “while we anticipate that rising inventory will eventually slow the feverish pace of competition, the typical buyer has yet to see significant relief from rapid home sales and record high asking prices. “Hale said.
The median sale price of existing homes hit $407,600 in May, up 14.8% from May 2021, according to the National Association of Realtors. This represents 123 consecutive months of year-over-year increases.
Mortgage rates are also jumping. The 30-year fixed mortgage rate averaged 5.81% as of June 23 based on Freddie Macreaching a high of nearly 14 years.
Together, increases in prices and mortgage rates have made buying a home simply unaffordable for many Americans.
The national median mortgage payment totaled $1,897 in May, up $513, or 37%, since the start of the year, according to the Mortgage Bankers Association.
This lack of affordability sends many potential buyers towards renting. A total of 74% of single-family home owners said in May they expected continued and sustained rental activity over the next six months, according to a survey by John Burns Real Estate Consulting, quoted by the Wall Street Journal.
Of course, the high demand for rentals also makes many of them unaffordable. Rents for single-family homes jumped a record 14% in the 12 months to April, according to CoreLogic. It’s the 13the consecutive month of all-time highs.
For most of us, all of this means we have no choice but to pay more for our accommodation, unless you already own a home and are content to stay there.