State of the national housing market 2022
Existing-home sales went down for the fourth consecutive month, slumping by 3.4 percent in May from the previous month, the National Association of Realtors reported.
The tide isn’t turning anytime soon, with low inventory, high mortgage rates and higher prices limiting deals and sidelining some would-be buyers.
“Further sales declines should be expected in the upcoming months given housing affordability challenges from the sharp rise in mortgage rates this year,” said NAR chief economist Lawrence Yun in a statement.
The interest rate for 30-year, fixed-rate mortgages jumped to 5.23 percent in May, up from 4.98 percent in April, according to Freddie Mac. On Tuesday the average rate was 6 percent.
However, as sales slowed, housing prices continued to soar in May. The median price for existing homes rose 14.8 percent in May from a year earlier to a record $407,600. That’s no surprise: The median price has consistently hit record highs each month from the year before for nearly 10 years.
Yun suggested that the inventory levels needed to nearly double for the appreciation of home prices to slow down.
Across the country, there were 1.16 million units for sale or under contract at the end of May, up 12.6 percent from April and down 4.1 percent from May 2021, according to the NAR.
The pace of price appreciation ticked up everywhere in the U.S., with the largest increase in the South (for the ninth consecutive month), followed by the West, then the Midwest and Northeast.
Homes that sold were not on the market for long, as has been the case for a while. Properties that went into contract last month typically were on the market for 16 days, down from 17 days in April and 17 days in May 2021. Only 12 percent of homes sold in May were on the market for more than a month.
Demand for houses has exceeded supply since the start of the pandemic. Some Americans accelerated buying plans or sought to take advantage of remote work and low interest rates, while would-be sellers were able to change jobs without moving or refinanced before rates rose. But with remote work becoming the new normal, housing inventory could continue to get squeezed.
Updated: Boston Real Estate Blog 2022
Just updated: A tight housing supply market is fueling the continuous rise in prices in the Boston condo for sale market in 2022. But it looks like changes are on the horizon.
State of the national housing market:
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The Wall Street Journal runs some numbers to determine where there are signs of strength and weakness in the national housing market.
The paper analyzed data in 28 major metropolitan areas to determine “overall strength”, based on months of available supply of homes listed for sale, change in inventory since last year, average price change during that time, employment outlook over the next two years, and percentage of loans overdue.
The Boston metropolitan area?
Overall? We get a “moderate”.
Change in housing inventory, past 12 months? Down 10.9% (they include single family, condos, and townhouses in total)
Months supply: 6.7
Price change: -8.5%
Loan payments overdue: 3.6%
Employment outlook: Very weak
VERY WEAK??? Like I don’t have enough to worry about?
The loan payments overdue is an encouraging sign, though. We’ve got the sixth lowest overall, out of 28 MSAs. And, we’ve had the biggest drop in inventory out of all 28 areas.
For price changes, we’re right in the middle at #14, meaning we’re doing better than half because prices have dropped more (meaning, housing has become more affordable) or we’re doing worse than half because prices hae dropped more (meaning, owners are losing their shirts).
Source: Where Housing Is Headed – By James R Hagerty, The Wall Street Journal
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Last Updated: 2022