Hello LOs!
Comparing this year's stats to 2021 suggests a rapid cool-down of the housing market. But to get a fuller picture, I looked at the same data from 2019, which suggests housing demand is still elevated compared to pre-pandemic years.
In April, 61% of home offers faced a bidding war, down from 67% a year ago on an adjusted basis, according to Redfin. But compared with April 2019, when about 15% of offers faced competition, it's still a strong sellers' market.
Nationally, the share of homes marked down last month rose 1.3 percentage points to 6.9% year over year. According to Realtor.com's data, that figure is still 9 percentage points below the levels between 2017 and 2019.
If housing stats show this is still a very heated market compared to 2019, then what is worrying housing industry experts? The main culprits are soaring mortgage rates and high home price appreciation.
With higher mortgage rates, "less than 50% of new and existing home sales are affordable for a typical family," said Robert Dietz, chief economist at National Association of Home Builders. "The housing market is facing growing challenges."
In a rising rate environment, consumer confidence to sell or buy a home is greatly affected.
About 76% of Americans said it's a bad time to buy a house in April, up from 73% in March. Overall, Fannie Mae's Home Purchase Sentiment Index dropped to 68.5, marking the lowest level since May 2020. In April 2019, the index was 88.3, indicating Americans were way more optimistic about buying or selling a home pre-pandemic.
The median home price growth in April was 14.8%, marking 122 consecutive months of year-over-year increases, NAR estimates. The double-digit home price growth has led our lead analyst, Logan Mohtashami, to label this housing market "savagely unhealthy," and to advocate for higher rates to create more days on market.
LOs, what are you keeping a close eye on to monitor the housing market? Please send your thoughts to me at connie@hwmedia.com
Connie Kim
Mortgage reporter, HousingWire
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