National Association of Home Builders and Wells Fargo Housing market index It fell by 2 points to 67 in June, reaching the lowest level for the sixth straight month since June 2020. A value above 50 indicates that more builders consider the condition better than bad.
The decline in optimism reflects high inflation and economic stagnation. Material costs for housing construction have increased by 19% year-on-year, Mortgage rates With the exception of many potential homebuyers from the market, it has skyrocketed to the highest level since 2008. As a result, the total number of housing starts in May decreased by more than 14%, and the number of single-family housing starts decreased by more than 9%. US Census Bureau..
“Delivery delinquency, labor shortages, and spikes in input costs” can be a headache for homebuilders, but demand plummets due to “wider macroeconomic problems,” said Joel Griffith, a researcher at the Heritage Foundation. “The builders are having a hard time unloading the completed home,” he said. .. “
Government-backed mortgage company Freddie Mac Thursday announced that the benchmark 30-year fixed rate mortgage surged to 5.78%. This is a 0.55% increase in a week, the largest increase since 1987. Interest rates have been below 3% for most of the last two years. Still, it began to rise to nearly 6% in early 2022.
“The mortgage payments for a typical home with a 20% down payment jumped from $ 1,500 to $ 2,355 — an amazing 57% increase in monthly payments,” Griffith said. “During this time, many families are losing nearly $ 2,600 a year in inflation-adjusted income. Equity indexes have been officially announced on the bear market (over 20% overall decline) and down payment resources. The family is aware that it is declining. “
Indeed, following the news of the Consumer Price Index (CPI) 8.6% increase The stock exchange officially entered the market between May 2021 and May 2022. Bear market area..Dow Jones Industrial Average Less than 30,000 On Thursday for the first time since January 2021 in the midst of aggressiveness Rate hike From the Federal Reserve, which was intended to fight inflation.
Optimism among homebuilders was highest in the South, with a three-month moving average of 78 in the Home Market Index.Western — some homes The most expensive real estate Nationwide — The most severe decline was seen in every region, down 9 points to a value of 74.
Luxury home buying activity, defined as the top 5% of the market, Rapid decline.. According to a Redfin report obtained by The Wall Street Journal, sales from February to April 2022 were down 18% year-on-year.
From the second quarter of 2020 to the first quarter of 2022, the median home sales price rose from $ 322,600 to $ 428,700. That’s a 33% increase in less than two years. US Census Bureau..
Griffith told The Daily Wire that the federal government would need to “reduce subsidies to the housing market” through government-sponsored companies such as Freddie Mac and Fannie Mae to return to more affordable prices. Meanwhile, the Federal Reserve needs to “stop buying mortgage-backed securities.” This is the decision of Federal Reserve Chairman Jerome Powell. Admitted Last year as a factor behind the soaring house prices. Griffith also said governments around the world “must stop COVID-related interference in the supply chain.”