Homebuyers willing to scan the U.S. housing market will see several promising signs: Homes are taking longer to sell, and Top sellers in major metropolitan marketsReducing prices by 15% in July.
Last month, new home sales fell nearly 13 percent from June. Government data Released on Tuesday, more evidence emerged that the pandemic has dampened residential demand.
But that doesn’t necessarily mean buying a home is becoming more affordable. The new data showed the median price of a new home was $439,400 in July, compared to $402,400 in June.
Why aren’t American homes becoming more affordable?
America is suffering from a housing shortage, so the budgets of the wealthy are still setting housing prices in most places. wrote Redfin Chief Economist Darrell Fairweather. Mortgage rates, meanwhile, There are quite a few Before the pandemic.
The Home Affordability Index, an indicator compiled by the National Association of Realtors that measures whether a typical family can qualify for a mortgage, It fell to a 33-year low in June..
It will take time for the pandemic conditions that led to the historic rise in housing prices. In addition to supply chain issues, prices were driven up by buyers who had no intention of living in the homes they purchased. Investors who have bought or flip properties to rent out. About a quarter Single Family Homes for Sale in 2021 Although they now make up a smaller portion of homebuyers, they continue Play the role in setting prices.
And even as more home buyers exit the market, the number of homes for sale remains tight. That means home prices are unlikely to fall as they did during the 2008 financial crisis. Robert Dietz, chief economist of the National Association of Home Builders (NAHB), expects that most housing markets will likely experience only single-digit price declines from their peaks.
Where are US mortgage rates going?
Housing experts are divided about whether mortgage rates will rise or fall in the coming weeks. Like everyone else, they are awaiting clarification from the US Federal Reserve meeting next month. “The wild card is the path of the future for monetary policy,” Dietz said. “The September Fed announcement will be key.”
But even if mortgage rates fall, home buyers shouldn’t expect any deals in the near future. The NAHB expects its affordability index to continue to decline in response to higher mortgage rates, Dietz added, and to level off by the end of the year.