{"id":18091,"date":"2023-06-04T14:57:48","date_gmt":"2023-06-04T18:57:48","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/housing-ended-spring-with-a-whimper-whats-next-for-prices-mortgage-rates\/"},"modified":"2023-06-04T14:57:50","modified_gmt":"2023-06-04T18:57:50","slug":"housing-ended-spring-with-a-whimper-whats-next-for-prices-mortgage-rates","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=18091","title":{"rendered":"Housing Ended Spring With a Whimper. What\u2019s Next for Prices, Mortgage Rates."},"content":{"rendered":"
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This spring was a challenging one for prospective buyers. This summer might not be any better.\u00a0<\/p>\n

Higher mortgage rates, which peaked above 7% in late 2022, stopped both home buyers and sellers in their tracks, putting an end to the pandemic home-buying boom. Since the year began, mortgage rates have bounced between about 6.1% and 6.8%, adding significantly to the cost of buying a home, compared with the historically low rates earlier in the pandemic. That priced out some would-be buyers, including some who nixed listing their current homes, further reducing the number of properties up for sale.<\/p>\n

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The result: significantly fewer home sales are happening in the existing-home market, which generally makes up the majority of transactions. Existing homes in April were sold at a seasonally adjusted annual rate of 4.28 million, the slowest April rate since 2011, according to National Association of Realtors data.\u00a0\u00a0<\/p>\n

Early data show the slowdown likely didn\u2019t stop in May.
\n Redfin
\n \u2018s (ticker: RDFN) measure of pending home sales for the four-week period ending May 28 was 17% lower than a year ago\u2014a decline the brokerage characterized as the second-largest since January.\u00a0<\/p>\n

Higher rates have yet to abate. Mortgage rates have been on an upward climb in recent weeks as markets updated their expectations for the path of monetary policy. The average 30-year fixed mortgage rate, which typically moves with the 10-year Treasury yield, rose to 6.79% this week, according to the results of
\n Freddie Mac\u2019s<\/span>
\n weekly primary mortgage market survey\u2014the highest level since November.\u00a0<\/p>\n

\u201cMortgage rates jumped this week, as a buoyant economy has prompted the market to price in the likelihood of another Federal Reserve rate hike,\u201d Sam Khater, Freddie Mac\u2019s chief economist, said in a statement last week.\u00a0<\/p>\n

Initially, the market was expected to thaw by summer. Now, the summer\u2019s prospects are looking as slow as the spring. \u201cWith mortgage rates being high, we were hoping that this summer would be a bit of a recovery for the housing market,\u201d says Daryl Fairweather, Redfin\u2019s chief economist. \u201cThat doesn\u2019t look like it\u2019s going to pan out; it looks like it\u2019s going to be more of the same.\u201d<\/p>\n

As noted, a dearth of homes for sale is a problem. New listings were down 23.4% from the year prior, according to Redfin\u2019s gauge.\u00a0<\/p>\n

That lack of inventory is a \u201cconstraint on how fast home sales can go,\u201d says Mike Fratantoni, the Mortgage Bankers Association\u2019s chief economist. Fratantoni doesn\u2019t expect sellers to enter the market in greater numbers until later in 2023 or in 2024, he says.\u00a0<\/p>\n

The Mortgage Bankers Association in fact expects existing-home sales to fall to a seasonally adjusted annual rate of about 4.19 million in the third quarter, down from an anticipated 4.35 million in the second quarter.\u00a0<\/p>\n

The lack of inventory will keep home prices \u201cessentially flat\u201d over the next two years, Fratantoni said. \u201cWith a lack of supply, and demand still holding reasonably well, that\u2019s keeping prices from dropping,\u201d he says.\u00a0<\/p>\n

Prices in March, the most recent month for which Case-Shiller data is available, actually increased a seasonally adjusted 0.4% nationally from the month prior, the strongest gain since last May.\u00a0<\/p>\n

\u201cThe modest increases in home prices we saw a month ago accelerated in March 2023,\u201d Craig J. Lazzara, Managing Director at S&P Dow Jones Indices, said in a statement. \u201cTwo months of increasing prices do not a definitive recovery make, but March\u2019s results suggest that the decline in home prices that began in June 2022 may have come to an end.\u201d<\/p>\n

Indeed, Redfin data suggest that home price trends are improving. The median sale price measured by the brokerage began to fall below year-ago levels in February. The median sale price in the four-week period ending May 28 was down 1.9% from a year earlier\u2014a drop the brokerage characterized as the smallest decline in two months.\u00a0<\/p>\n

Still, parts of the country are seeing significant price weakness. Year-over-year price declines for the four weeks ended May 28 were greatest in Austin, Oakland, Calif., and Las Vegas, according to Redfin, while prices were strongest in Milwaukee, Cincinnati, and Miami.<\/p>\n

Write to Shaina Mishkin at shaina.mishkin@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This spring was a challenging one for prospective buyers. This summer might not be any better.\u00a0 Higher mortgage rates, which peaked above 7% in late 2022, stopped both home buyers and sellers in their tracks, putting an end to the pandemic home-buying boom. Since the year began, mortgage rates have bounced between about 6.1% and […]<\/p>\n","protected":false},"author":1,"featured_media":18092,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-18091","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nHousing Ended Spring With a Whimper. What\u2019s Next for Prices, Mortgage Rates. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"This spring was a challenging one for prospective buyers. 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