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This Week In Real Estate – October 22, 2023

Central Oregon Real Estate - This Week In Real Estate

This Week In Real Estate – October 22, 2023.

ATTOM released its Q3 2023 U.S. Home Sales Report, this week in real estate, showing gross profits on typical single-family home and condo sales across the country rose 5 percent quarterly, to $129,900, and were up 3.2 percent annually. The improvement in typical profit margins, from 56.6 percent in the second quarter of 2023 to 59 percent in the third quarter, came amid a rebound in the U.S. housing market that pushed the median nationwide home price up 2 percent to a new high of $350,000. “High mortgage rates have slowed price surges, with monthly increases returning to regular seasonal averages,” said Selma Hepp, Chief Economist CoreLogic. The pace of home price growth we experienced in recent years was unsustainable. It had to slow down and that is what we are starting to see – deceleration of appreciation, not depreciation. According to the U.S. Department of Housing and Urban Development this week, total housing starts posted a solid month-over-month gain in September, increasing by 7 percent. Total permits decreased 4.4 percent in September. Below are a few newsworthy events from the third week of October that influence our business:

U.S. Home-Seller Profits Continue As Rising Home Values Hit New Highs In Third Quarter.

ATTOM released its third-quarter 2023 U.S. Home Sales Report on Thursday, which shows that profit margins on median-priced single-family home and condo sales in the United States increased to 59 percent in the third quarter – the second straight quarterly increase following several declines. The improvement in typical profit margins, from 56.6 percent in the second quarter of 2023, came amid a continued rebound in the U.S. housing market that pushed the median nationwide home price up 2 percent to a new high of $350,000.The continued gains in profits and prices around the U.S., while representing typical growth for a third-quarter period, still came amid a mix of forces that could turn the market up or down over the coming months. Both measures improved over the Summer as the supply of homes for sale in the U.S. remained historically low. That put upward pressure on prices, which, by extension, helped to push up profits. But mortgage rates started increasing again in the third quarter, rising toward an average of 8 percent for 30-year fixed loan following a stable second quarter. Nationwide, the median home price rose to a new high of $350,000, up 2 percent over the previous record of $343,000 in the second quarter of 2023 and 6.1 percent from $329,900 in the third quarter of last year. Both the nationwide profit margin and median home price have increased since an unusual decline from the middle of 2022 to the early part of 2023 that had threatened to reverse a decade-long market boom. “Prices and profits around the U.S. got another boost over the Summer as the housing market continued recovering from last year’s setbacks,” said Rob Barber, chief executive officer for ATTOM. “Things do remain uncertain heading into the market’s annual Fall slowdown, especially at a time when mortgage rates are rising again, home affordability is getting tougher and the potential for a recession hangs in the air. But the latest gains fell in line with what we often see during the third quarter and showed that any predictions of an extended market fallback may have been premature.” Gross profits on typical single-family home and condo sales across the country also went up during the third quarter of 2023. Full Story…

Single-Family Starts Post Unexpected Gain In September As High Interest Rates Persist.

Despite elevated mortgage rates averaging above 7%, single-family starts posted a solid gain in September as more buyers are turning to new homes because of a dearth of inventory in the resale market. Overall housing starts increased 7% in September to a seasonally adjusted annual rate of 1.36 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The September reading of 1.36 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts increased 3.2% to a 963,000 seasonally adjusted annual rate. However, single-family starts are 12.8% lower year-to-date due to higher interest rates. The multifamily sector, which includes apartment buildings and condos, increased 17.6% to an annualized 395,000 pace. Home builder sentiment has now declined for three straight months, posting a level of just 40 in October. This decrease suggests that the pace of single-family permits and starts may decline during the final months of 2023. But in another sign that higher interest rates have slowed the market, the number of single-family homes under construction in September was 674,000, which is almost 15% lower than a year ago. Overall permits decreased 4.4% to a 1.47-million-unit annualized rate in September. Single-family permits increased 1.8% to a 965,000 unit rate. Single-family permits are down 13.4% year-to-date. Multifamily permits decreased 14.3% to an annualized 508,000 pace. Full Story…

Feds Want To Make It Easier For Home Buyers To ‘Build Wealth’ With Accessory Dwelling Units.

A new federal housing policy will make it easier for some home buyers to qualify for a mortgage by allowing them to include rental income from accessory dwelling units as part of their application. The Federal Housing Administration announced Monday that under a new policy, it will allow lenders to count income from accessory dwelling units when underwriting a mortgage. The rental income from the ADU will be included in the borrower’s qualifying income. The change in policy will “allow more borrowers to qualify for FHA financing for properties with ADUs,” the FHA said in a press release. “This not only helps more people qualify for a mortgage and build wealth, it also helps to boost the supply in neighborhoods where housing is least available,” Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said during the Mortgage Bankers Association’s annual press conference on Monday. For homeowners looking to add an ADU, 50% of the estimated rental income from the unit will be used to qualify for a mortgage under the FHA’s Standard 203(k) Rehabilitation Mortgage Insurance Program. For homeowners who would like to buy a property with an existing ADU, the new FHA policy allows 75% of the estimated ADU rental income to count toward their ability to qualify for an FHA-insured mortgage. The FHA also said that it would include ADU-specific appraisal requirements, so that appraisers can capture estimated rents that the unit can generate. “FHA-approved lenders may begin offering borrowers mortgages on properties with ADUs under the new policies effective immediately,” the agency said. Full Story…


Originally compiled & posted by President &CEO, Melanie Weidenbach 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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