Rates Rise Again but Rents Barely Climb!

Mortgage Rates May Breach 8%, But Don’t Expect a Major Market Shift

More potential buyers will be priced out and the inventory deficit may deepen the higher mortgage rates rise.

The housing market is not likely to see significant changes if mortgage rates rise above 8%.
The income needed to afford a typical home would rise from about $107,000 at today’s mortgage rates to nearly $114,000 if rates hit 8%.
Building more homes to address the housing shortage is the only sustainable way to improve affordability and give more people access to homeownership.

Housing affordability is about as bad as it’s been during the past 15 years. Record-fast price growth during the pandemic has made saving for a down payment a bigger hurdle, and the higher mortgage rates of the past year mean the monthly payment is often a burden, as well. Mortgage rates surpassed a 22-year high this month and look like they may climb above 8% for the first time since August 2000. READ MORE

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Rents Are Just Barely Climbing (September 2023 Rent Report)

Annual rent growth cooled again, to 3.2%, in September.

The typical U.S. rent is $2,047. That’s 3.2% higher than a year ago.
Monthly rent growth continues to slow, as expected in autumn.
Rent growth remains strongest in affordable markets, while declining modestly in some pandemic boomtowns like Austin and Las Vegas.

Asking rents climbed by 0.2% in September, to $2,047, according to the latest edition of the Zillow Observed Rent Index (ZORI). Typical asking rents are now 3.2% higher than one year ago, continuing a steady, 19-month-long slowdown in the annual growth rate since hitting a record-high 16% in February 2022. In fact, September’s annual growth rate is now solidly below the annual pace observed just prior to the pandemic: Year-over-year growth hovered between 4.0% and 4.2% in 2019.

The 0.2% monthly increase is a step down from August’s 0.3% monthly growth, but a little faster than the average pre-pandemic September, in which rents were unchanged, averaged over data from 2015 to 2019. This past third quarter saw national monthly rent growth slightly higher than pre-pandemic seasonal averages, after several months of cooler growth. That could reflect rent growth’s underlying resilience, or a change in seasonal patterns due to the pandemic. September’s monthly growth rate was roughly the same as last September’s (0.2%); last October was the first month in two years where rents declined on a monthly basis, so it will be interesting to see if rent change tips below zero again this October.

Annual rent growth is cooling off thanks in part to a deluge of new multifamily construction – financed and started while mortgage rates were at historic lows – finally coming onto the market and accepting new tenants.

By the same token, much higher borrowing costs now are likely to impede the flow of new apartment construction. Construction starts for buildings with five or more units stepped sharply lower in August, to a three-year low. While a large number of multifamily buildings are still under construction, financing and cost challenges have certainly increased headwinds for the industry.

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Another Review from a

1st Time Buyer

Nicky did a fantastic job getting us into our dream home. I have known Nicky for a long time and she is personable, easy to talk to, and genuinely cares about her clients. She is also determined and 100% present with you throughout the home purchasing process. In 24 hours we viewed a property, placed an offer, offer was accepted, and escrow was opened - it was incredible. As a first time homebuyer, Nicky was with me every step of the way and she often reached out just to say hi and see if there was anything she could help with, which meant the world to me. Nicky really cares about her clients and she goes that extra mile to make sure her clients are above and beyond satisfied. Beyond the home purchasing process, Nicky helped me find an insurance agent that would cover CA home insurance (as it's hard to find these days!) and also connected me with another one of her clients that was selling a beautiful couch, which we bought and Nicky was there with us as we picked up the couch too. She did a flawless job getting me into the home with the overall purchasing process, but also was there for things beyond just the purchase - I feel so lucky. I think the world of Nicky and she is such a go-getter and a wonderful, loving person. You will love working with Nicky!

Julia W.

-I have experience helping First Time Buyers -

Very Happy for my Clients.

We all worked really hard to get it ready in a hurry for the market.

I hope the new buyers love the house and the neighborhood.

It will be a great house to grow into.

-I by Work By Referral-

In Escrow!

So excited for my Clients!

7604 Galleon Way

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Create a great offer by adding words like "free" "personalized" "complimentary" or "customized." A sense of urgency often helps readers take an action, so think about inserting phrases like "for a limited time only" or "only 7 remaining!"

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Old homes are selling for more than new ones

This is quite an anomaly for residential real estate.

BySam Klebanov

July 28, 2023

A house potentially haunted by the poltergeist of a long-deceased ex-resident will now cost you more than a brand-new place, upending the usual housing market order.

Axios reports that the median existing single-family home was going for $416,000 last month, while the median price tag for just-built ones was $600 lower.

The housing market typically prizes youth over history. Older homes have higher repair and energy costs, which lower their attractiveness to buyers—a Victorian with ornate molding is charming only until the roof starts leaking.

Why is old now pricier than new?

It's mostly about interest rates: Since the Fed kept hiking them, the average 30-year mortgage rate now sits at 6.81%, more than double its lowest point during the pandemic. That’s making current homeowners, many of whom snagged their mortgages before prices went into the stratosphere, reluctant to sell their pad and get saddled with a much more expensive mortgage for a new one.

This creates a shortage of pre-owned homes on the market but no shortage of aspiring homeowners. Some developers have signaled they’re more than happy to swoop in with more affordable homes for first-time buyers, and housing construction has begun to recover from a steep decline last year.