Stabilizing Economy Holds Key to Reviving Home Sales

October’s lower inflation rate is a welcome sign for the housing market.

A recent report showing that the rate of inflation declined in October is good news for the real estate industry, and possibly a bellwether of declining mortgage rates in coming months, Lawrence Yun, chief economist for the National Association of REALTORS®, told thousands of attendees Friday at NAR NXT, The REALTOR® Experience in Orlando, Fla.

More Buyers Taking a Look at New Construction

After bottoming out at 19% in the first quarter of 2022, the popularity of new homes continues to rebound, as the share of buyers looking for new construction rose to 21% and 27% in the second and third quarters of the year, respectively. A possible factor behind this trend is that the inventory of new homes for-sale is 25% higher than a year ago, while the supply of existing homes on the market is unchanged.

Percentage of Homeowners Considered Equity-Rich Sees Boost

As record high home prices begin to dip, homeowner equity remains high.

According to ATTOM, in the third quarter of this year, 48.5% of homes with a mortgage were considered equity-rich, which means that the loan balance remaining on the mortgage is not more than 50% of the home’s estimated market value. This is an increase from the second quarter, when it was 48.1% and an increase of 9% year over year. Ultimately, 94.3% of homeowners with a mortgage have some equity, up from 92.9% year over year.

Percentage of First-Time Buyers Falls

The number of first-time homebuyers between July 2021 and June 2022 fell 8%, with first-time buyers representing just 24% of all homebuyers.

According to NAR’s 2022 Profile of Homebuyers and Sellers, the average age of the first-time homebuyer rose, from 33 years old to 36 years old, an all-time high. The average age of all buyers was 53, up from 45 year over year. The average age for repeat buyers was 59, another increase. This is the oldest for each category since 1981, when the average age for all buyers was just 31. The biggest share of buyers in the past year were aged 55 to 74, representing 42% of all buyers. Sixty-one percent of buyers were married couples, 17% were single females, 10% were unmarried couples and 9% were single men. The majority of recent homebuyers (69%) have no children under 18 in the household, while 12% have one, 8% have two and 10% have three or more.

Should You Sell Your Home This Winter?

There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to sell your house. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision.

1. Should I Wait To Sell?

Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using data from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market:

Mortgage Market Update

Incoming data suggests inflation may have peaked but it remains elevated and the Federal Reserve is likely to keep interest rates higher.

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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.