As the Fed’s aggressive policy pushed all kinds of borrowing costs higher, mortgage rates at one point last year hovered above 7%, and affordability worsened for many home buyers.
“It is possible that the upcoming peak buying season of 2023 could lead to increased profits, owing to favorable mortgage rates and other factors,” ATTOM chief executive Rob Barber said.
“Over the next few months, we can expect to gain more clarity regarding whether the current market stagnation is a short-term aberration or a more significant trend.”
Another sign pointing to a softer housing market is lumber. Prices for the key building commodity dropped another 4% yesterday toward multi-year lows.
Data for March shows pending home sales unexpectedly dropped 5.2% in the month (economists were forecasting an increase of 0.5%).
“The lack of housing inventory is a major constraint to rising sales,” National Association of Realtors’ chief economist Lawrence Yun said.
“Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally.”
While housing may be slowing for the moment, researchers are still warning of a bubble that’s set to pop in the next decade, fueled by jarring shifts in demographics on the horizon.
Millennials, who are now between their mid-20s and early 40s (that is, prime home-buying years), have helped push up prices, and the largest generation since the Baby Boomers is creating a wave of demand that surpasses supply of houses for sale.
That opens the door to a potential housing glut and crash in home prices.
“A generational housing bubble is on the horizon,” Indiana University Center for Real Estate Studies said. “Demand reversal will intensify by the mid-2030s, when the annual number of homes that seniors add back to the market is expected to be 40% higher than current levels.”
What are you seeing in the housing market in your part of the country? Are things slowing down or is the market still hot? Tweet me (@philrosenn) or email me ([email protected]) to let me know.
In other news:
2. US stock futures fall early Friday, as investors mull the latest round of corporate earnings, which included Amazon, Snap, and Pinterest. Here are the latest market moves.
3. Earnings on deck: ExxonMobil, Chevron, and Sony, all reporting.
10. Hasbro stock spiked Thursday after revenue from its Magic: The Gathering franchise soared last quarter. The classic card game is still firing up fans, based on record preorders on hand for the next release, the company said. In other words: What gamer fatigue?