Hello! I hope the year has been kind to you. I’m dedicated to giving you the most up to date information on the real estate market in your area.
As we near the end of 2022, activity in the housing market continues to slow as indicated by House Canary.
Elevated interest rates stemming from the Fed’s fourth consecutive 75-basis-point interest rate hike coupled with seasonality in the housing market has led to the seventh consecutive month of double-digit, year-over-year declines in listings under contract.
Although, Mortgage rates slid further this week, bringing the streak of declines to four in a row. The benchmark 30-year fixed mortgage rate averaged 6.33% on Dec. 8, down from 6.49% last week, according to Freddie Mac’s Primary Mortgage Market Survey.
Freddie Mac chief economist Sam Khater said the consecutive drop was due to “increasing concerns over lackluster economic growth.” “Over the last four weeks, mortgage rates have declined three-quarters of a point, the largest decline since 2008,” he added. The average 15-year fixed-rate mortgage fell nine basis points week over week to 5.67%. A year ago, at this time, the 15-year FRM was 3.10%.
“While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates,” Kan said. While Fannie Mae’s latest Home Purchase Sentiment Index increased for the first time in months, up 0.6 points in November, it remained 17.4 points lower than a year ago.
“Consumers continue to expect mortgage rates to rise but home prices to decline, a situation that we believe will contribute to a further slowing of home sales in the coming months, as both homebuyers and home-sellers have a reason for apprehension,” said Fannie Mae chief economist Doug Duncan. “We expect mortgage demand to continue to be curtailed by affordability constraints, while homeowners with significantly lower-than-current mortgage rates may be discouraged from listing their property and potentially taking on a new, much higher mortgage rate.”
Nationally monthly new listing volume is down 25.1% compared to November of 2021 and removals, which are people who take their house off the market, are up 64.3% from the same month.
Get the report for your state, provided by House Canary here.
Increased interest rates, with more rate hikes planned in the future, are keeping both buyers and sellers wary of the housing market.
What to expect for 2023? Most likely, we expect continued tight supply and shrinking demand.
So, what happens now?
Inflation is a driving force when it comes to interest rates and there is a big report coming on Dec. 13th