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This Week In Real Estate – July 9, 2023

Central Oregon Real Estate - This Week In Real Estate

Defying Doomsayers.

Fannie Mae Senior Vice President and Chief Economist, Doug Duncan, believes “consumer confidence in the housing market has plateaued, suggesting that many consumers may be coming to terms with elevated mortgage rates and high home prices.” The June Consumer Confidence Index was released, this week in real estate, rising to its highest level in 17 months. Nearly one year removed from many economists predicting a housing crash, the real estate market has proven those predictions wrong due largely to historically low levels of active inventory and stable demand. Removing the unicorn years of 2020-2022, on average, active inventory in June was 50.6% below pre-pandemic 2017 – 2019 levels. Below are a few newsworthy events from the first week of July that influence our business:

The US Housing Market Is Defying Doomsayers Thanks To A Supply Crunch.

The US housing market is defying predictions for a crash this year – thanks to a supply crunch and strong demand, Fannie Mae says. “Current housing market dynamics continue to be fueled by the lack of existing homes available for sale, a trend that did not improve during the spring homebuying season when more homes are typically put on the market. This has supported a return to home price growth in recent months and continued to boost new home construction,” Fannie Mae wrote in a press release. It’s no surprise that housing inventory is tight in a world of higher borrowing costs. Homeowners have been tempted to stay locked into low-rate mortgages, leaving them reluctant to sell, following the Federal Reserve‘s aggressive interest-rate increases over the past 15 months in a bid to cool inflation. “Housing’s performance is a testimony to the strength of demographic-related demand in the face of Baby Boomers aging in place and Gen-Xers locking in historically low rates, both of which have helped keep housing supply at historically low levels,” Fannie Mae’s chief economist Doug Duncan said. “Homebuilders continue to add to that supply, but years of meager homebuilding over the past business cycle means the imbalance will likely continue for some time,” he added. Full Story…

Mortgage Rates Hit Highest Average So Far This Year.

The mortgage rate for a 30-year home loan averaged 6.81% this week, reaching its highest point so far this year, Freddie Mac reports. “This upward trend is being driven by a resilient economy, persistent inflation, and a more hawkish tone from the Federal Reserve,” says Sam Khater, Freddie Mac’s chief economist. “These high rates, combined with low inventory, continue to price many potential home buyers out of the market.” Mortgage applications for home purchases are fluctuating – dipping 5% last week, according to the Mortgage Bankers Association – with the movement in borrowing costs. Despite the week-to-week fluctuations, some home buyers may be adjusting to a new normal for mortgage rates in the 6% to 7% range, says George Ratiu, chief economist at Keeping Current Matters. Mortgage rates began climbing late last year and have stayed within that range ever since. The pace of home sales has mostly kept steady over the past few months, Ratiu says. Builders are pushing construction activity higher, too, he adds. Full Story…

Consumer Confidence Rebounds in June?

Consumer confidence in June rose to its highest level in 17 months as recession concerns eased. The Consumer Confidence Index, reported by the Conference Board, increased 7.2 points from 102.5 to 109.7 in June, the highest level since January 2022. The Present Situation Index rose 6.4 points from 148.9 to 155.3, and the Expectation Situation Index climbed 7.8 points from 71.5 to 79.3, the highest since December 2022. However, it’s still lingering around 80 – a level associated with a recession. Full Story…

Originally compiled & posted by Jason Waugh on the Berkshire Hathaway HomeServices Northwest Real Estate company blog.

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Mitch Darby

I am a real estate broker, architect (both licensed in the State of Oregon), and life-long Oregonian. If you are looking to buy or sell, I can help! I have Northwest Knowledge and am proud to be associated with Berkshire Hathaway HomeServices - Real Estate's Forever Brand!

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