Here’s Why Experts Believe the U.S. is in a Housing Boom and Not a Bubble |
The U.S. housing market has been an unlikely beneficiary from the Covid-19 pandemic.
During the pandemic, home prices have climbed at a record pace. The median price for an existing home reached over $363,000 in June 2021, a 23.4% year-over-year increase.
“You can see in just basically the last 15 months or so, we’ve seen a dramatic acceleration in home price growth to levels we haven’t seen in decades,” CoreLogic chief economist Frank Nothaft said.
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Housing Market Update: 9% Increase in Pending Home Sales is Slowest Growth Since June 2020 |
Pending home sales rose 9%, the slowest growth since June 2020, while the actual number of pending sales fell to the lowest level since April 2021. More home sellers have started slashing their prices—another sign of softening seasonal homebuyer demand. Still, prices remain elevated, up 15% from a year earlier.
“The housing market has clearly become slightly more favorable to buyers,” said Redfin Chief Economist Daryl Fairweather. “Homes are taking longer to sell, which gives buyers more time to make thoughtful decisions about whether to make offers. Home prices have plateaued, so buyers shouldn’t feel rushed to buy before prices rise further. And the fact that more sellers are dropping their list price is a sign that sellers have to be realistic about their price expectations.” Read more from Redfin.
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US Home Price Growth Hit Record Level in June |
With little inventory, home-price growth in the U.S. hit a record high in June, rising 18.6% from the same period last year, according to the S&P CoreLogic Case-Shiller Index.
June marked the highest annual rate of home price growth since the index debuted in 1987, beating out the 16.8% annual growth rate logged the month prior, in May 2021.
“While the housing market feels like it has legs that never get tired, inventory and affordability constraints are still expected to put a damper on price growth,” said CoreLogic Deputy Chief Economist Selma Hepp. “Some early data suggests that the buyer frenzy experienced this spring is tapering, though many buyers still remain in the market. Nevertheless, less competition and more for-sale homes suggest we may be seeing the peak of home price acceleration. Going forward, home price growth may ease off but stay in the double digits through year-end.” Read more from Housing Wire.
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Decline in Refis Pulls Mortgage Application Volume Lower |
Mortgage application volume declined again last week, dragged down by flagging refinance activity. The Mortgage Bankers Association (MBA) says its Market Composite Index, a measure of that volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index was down by 3 percent.
The Refinance Index decreased 4 percent from the previous week and was 2 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 66.8 percent of total applications from 67.3 percent the previous week. Read more from Mortgage News Daily.
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Survey: Nearly Half of Renters Fear They’ll Never Own
Many are unaware of the many low down payment options available to first-time buyers
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Most renters aspire to be homeowners. But down payment barriers have many concerned if they’ll ever be able to own one day, according to a survey of 2,500 consumers from LendingTree.
Eighty-eight percent of respondents said they’d rather own a home than rent. Yet, 48% of renters say they worry about whether they’ll ever be able to buy, the survey shows.
Down payment barriers, home prices being too high, and difficulty qualifying for a mortgage due to a low credit score are the biggest concerns and obstacles to homeownership, respondents said. Further, “as the country grapples with a shortage of homes available to meet demand, many who don’t own homes fear they never will,” the research notes. Read more from NAR's Realtor Magazine.
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Exton Makes Realtor.com's List of Top Family-Friendly Suburbs in the U.S. for 2021 |
People pondering parenthood have long felt like they’ve landed in a high-stakes Choose Your Own Adventure story: Should they raise their family in a lively urban environment with limitless options for culture and entertainment, or opt for a more placid area with lots of green space and good schools—the real estate equivalent of eating your spinach?
But the COVID-19 pandemic has shifted the equation. Those fun urban locations seem a lot less fun these days, and having more space indoors and out became more appealing to everyone, especially those with kids. And it turns out that prioritizing bigger houses and better school systems doesn’t necessarily mean giving up big-city perks. To prove it, the data team at Realtor.com® set out to find the best suburbs outside the nation’s biggest cities that offer a rewarding lifestyle for parents as well as kids. Read more from Realtor.com.
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Mortgage Market Update
Mortgage Rates Stay Flat
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Economic growth and the acceleration in inflation have moderated in the last month, giving the markets comfort and leading to a stabilization in mortgage rates. Heading into the fall, home purchase demand is stable, home sales remain firm and above pre-pandemic levels, and inventory of unsold homes is tight but improving modestly. These factors will allow for home price pressures to ease over the remainder of the year. |
We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us. |
Plymouth Meeting Office: 610.834.8700
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Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570. |
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