This Week in Real Estate
Good Morning!
Fannie Mae released its November housing forecast This Week
in Real Estate reporting monthly price growth has moderated yet
year-over-year appreciation sits at the highest level in more than four
decades. The report is the first to project housing market activity through the
end of 2023 which expects double-digit home-price appreciation will last until
the middle of 2022 and it won’t be until 2023 when home inflation returns to a
single-digit pre-pandemic pace. Below are a few newsworthy
events from the fourth week of November that influence our business:
* The US Housing
Market Will Finally Be Back To Normal In 2023 – But Prices Will Be Stuck
Permanently Higher. If surging home prices put you off from buying a
house in 2021, you'll have to wait another year for the market to cool down.
The third quarter of 2021 likely marked the peak for the housing market's price
surge, economists at Fannie Mae said in its November housing forecast. The cooldown has started, but it will take time for
the market to normalize, the team added. Double-digit home-price inflation will
last until the middle of 2022, according to the forecast. It won't be until
2023 when home inflation returns to the 5% pace seen before the pandemic.
Monthly price growth has eased slightly, but the year-over-year pace still sits
at the highest level in more than four decades. The November report revises home construction lower while lifting
expectations for home sales. Put simply, Americans are still snapping up homes
at breakneck speed - but builders haven't been able to keep up. That
combination of factors is set to leave price growth at stifling highs
throughout 2022.
* Yun: Expect An
Unseasonably Hot Winter For Home Sales. “Compared to other past winter
seasons, this winter season’s sales activity will be stronger,” says Lawrence
Yun, chief economist of the National Association of Realtors. “This winter,
there will be more sales compared to pre-pandemic winters going back all the
way to 2006.” The momentum from the last few months is expected to continue.
From March through October, homes have been selling faster than they
traditionally do. “Although there are fewer buyers in the winter months than in
the competitive spring and summer period, all signs suggest that housing demand
remains high,” says Danielle Hale, realtor.com’s chief economist. Housing
inventories remain tight. The inventory of unsold homes fell by 12% in October
compared to last year, according to NAR data. A limited supply of homes for
sale is an ongoing issue for the housing market against continued strong demand
among potential home buyers. Homes are selling fast. Eighty-two percent of
homes sold in October were on the market for less than a month, according to
NAR data.
Full
Story…
https://magazine.realtor/daily-news/2021/11/24/yun-expect-an-unseasonably-hot-winter-for-home-sales
* Unusual Holiday
Home-Buying Surge Pushes Mortgage Demand Higher. An
unusual surge in home buying, just as the market enters the historically slow
holiday season, is driving mortgage demand higher. Total mortgage application
volume rose 1.8% last week compared with the previous week, according to the
Mortgage Bankers Association’s seasonally adjusted index. The increase was
largely driven by applications to purchase a home, which rose 5% for the week
but were still 4% lower than the same week one year ago. That was the
third-straight weekly gain. Buyers may be rushing in during the usually slow
holiday season because they are concerned that mortgage rates will move even
higher than they have in the past month. “The financial markets continue to
discern the Federal Reserve’s policy path in the coming months in light of the
current high growth, high inflation environment. Despite a fair amount of rate
volatility last week, mortgage rates were higher,” said Kan, MBA’s associate
vice president of economic and industry forecasting. “Borrowers continue to
lock in mortgages in anticipation of higher rates in the future.”
Full Story…
https://www.cnbc.com/2021/11/24/unusual-holiday-home-buying-surge-pushes-mortgage-demand-higher.html
Have a productive week.
Jason
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