These days, discussing the U.S. housing market is bound to bring up a myriad of conflicting views based on well-executed research and casual hearsay alike.
Here are some of the questions I’ve fielded over the past month.
Are home prices rising or falling?
Is it a buyer’s market or a seller’s market?
Have mortgage rates officially hit the bottom floor?
Is now the right time to buy a house?
And everyone’s favorite, it seems:
Is there a 2020 housing bubble and is it going to burst?
I don’t have a crystal ball to gaze into and be able to accurately predict the answers to these questions and others.
What I do have and what I do follow are statistics and updates from a lot of very trustworthy organizations that indicate one thing – and a rather surprising thing at that.
Though we’re in the midst of a historic health crisis, the residential housing market, at least according to the latest statistics, appears to be doing just fine.
The three key stats below shed light on the health of our current market.
According to the most recent data released by Freddie Mac, the 30-year fixed mortgage average rate increased to 2.96%, up from 2.88% a week ago. In mid-July, that rate fell below 3% for the first time ever. While rates for other types of mortgages including 15-year fixed and 5-year adjustable rate mortgages continue to trickle downward, the 30-year rate point increase is potentially showing new optimism in the market. This Washington Post article reporting on the latest Freddie Mac stats has more.
The statistics are increasingly showing us that it’s a seller’s market in many cities. While more Americans are buying houses, housing inventory in many communities is low. In June, the National Association of Realtors reported that its index of pending sales rose 16.6%, it’s highest level since 2006. The increase was surprising to many statisticians given COVID-19’s effect on our daily lives. National housing inventory numbers, according to Realtor.com, declined in July by 32.6% when compared to July of 2019. In short, it’s a seller’s market right now and there are more buyers looking for deals and likely willing to pay. But low inventories make way for a big change, which brings us to the next statistic.
Also according to Realtor.com’s July 2020 market stat update, the lack of newly listed homes on the market combined with pent-up buyer demand is steadily pushing home prices higher. The median national home listing price grew by 8.5% year-over-year to a new high of $349,000 in July. Of course, median home prices will vary in your community, but it’s clear that right now, home prices are on the rise.
So what does all of this mean for YOU, the borrower? At the end of the day, it really depends.
While it’s true the market is healthy from a demand and price perspective and it’s a really good time to take out a mortgage – a lot depends on your financial situation. You have to take a look at your finances holistically and decide if it’s really the right time to buy.
If you haven’t yet, check out my July blog on considerations for whether or not now is the right time to make the jump into homeownership or a new house.
I love chatting with clients about all things mortgages and, when you’re ready to invest, helping you determine the best loan program for your needs. Give me a call at 480-313-7103 or shoot me an email at firstname.lastname@example.org anytime!