Boston Condos for Sale and apartments fo rent in 2022
Consumer confidence in the housing market dropped to the lowest level since 2011, as both prospective buyers and sellers have become more pessimistic, according to a monthly survey released Monday by Fannie Mae.
Just 17% of those surveyed in July said now is a good time to buy a home, down from 20% in June. Even more telling, however, is that the share of sellers who think it’s a good time to list their homes dropped to 67% in July from 76% two months prior.
Far fewer consumers now think home prices will rise, while the share of those who think prices will fall jumped from 27% to 30%.
Fannie Mae’s Home Purchase Sentiment Index consists of six components: buying conditions, selling conditions, home price outlook, mortgage rate outlook, job loss concern and change in household income. Overall, the index fell two points in July to 62.8. It’s down 13 points from a year earlier. It hit an all-time high of 93.7 in summer 2019, before the pandemic.
“Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, wrote in a release.
Housing market sees inflection point as mortgage rates fall 32 basis points
The average rate on the 30-year fixed mortgage started this year around 3% and then began rising steadily, briefly crossing the 6% line in June, according to Mortgage News Daily. It fell back slightly since then but is still in the mid-5% range.
Just 6% of those surveyed think mortgage rates will fall, while 67% said they expect rates to rise further.
Sales of both new and existing homes have been falling sharply over the last few months, as affordability weakens and consumers worry about inflation and the broader economy.
Big losses in the stock market have also caused demand for higher-end homes to drop. More supply is coming on the market, which is helping a little bit, but inventory is still well below historical norms, especially at the entry level.
“With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop,” added Duncan.
Source: CNBC Real Estate
Updated: Boston Real Estate Blog 2022
Care to place a bet on first-quarter GDP, scheduled for release tomorrow?
From Wikipedia:
In macroeconomics, a recession is a decline in a country’s real gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.
In the US, the judgment of the business-cycle dating committee of the National Bureau of Economic Research regarding the exact dating of recessions is generally accepted. The NBER has a more general framework for judging recessions:
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.
I realize “terms and definitions” can sometimes be used to obfuscate real issues, but I think there is some merit to sticking with NBER’s definition of a “recession”. What we’re all wondering about is, will our economy be getting better or worse over the coming months, and how are we doing, so far?
My guess? Yeah, we had positive growth in the first quarter. Which means we’re not in a “recession”. So, take that, Feldstein!
This will do nothing to sooth the fears of rational people. They’ll jump on the number and say, “Well, that’s just one definition.” Or, “Well, maybe not technically, but we’re hurting!” Or, “Well, not in first quarter, but we will be in quarter #2!”
All I’m saying is, our economy seems to be in flux. Therefore, let’s not lose our cool. And, let’s not jump at every promise of “bailouts” and “fiscal stimuli”.
Regardless of what you read in the daily paper, tell me, are you really hurting right now? I mean, at all?
