But those sales came during a ‘Fed pivot’ fantasy that pushed mortgage rates down to 5%. Now the mortgage interest rate is nearing 6.5% for him.
To wolf richter for wolf street.
From July to mid-August, mortgage interest rates dropped sharply from the 6% range in mid-June. This is based on the widespread fantasy that the Federal Reserve (Fed) will “turn around” rate hikes. By mid-August, the average interest rate on a 30-year fixed mortgage he had dropped to 5%. Yesterday he was 6.47%. However, a temporary drop in mortgage rates slowed the decline in home sales, with August sales declining again from July to August, but at a slower pace.
However, the price fell sharply for the second month in a row, and the large price cuts also helped close some deals.
Median August sales of existing single-family homes, condominiums and co-ops that completed sales in August were down a sharp 3.5% from July. , to $389,500, according to the National Real Estate Association. Despite some seasonality, August’s rate of decline was much larger than usual, dropping from a 25% rise last summer to 7.7% year-over-year (data from YCharts). :
price drop in Europe In the midst of sluggish sales, we are making further progress. for example, In San Francisco and Silicon Valley, median prices have plummeted in recent months. – San Francisco and Santa Clara County (San Jose) now see year-over-year declines, while San Mateo County sees a slight increase, according to data from the California Real Estate Association.
sale The share of existing homes, condos and co-ops across the U.S. fell slightly from July to 4.8 million seasonally adjusted annual sales, roughly in line with June 2020 lockdowns, after a 5.9% plunge the previous month. level has been reached. According to the National Association of Realtors, reportIt was the seventh consecutive month of month-on-month decrease.
Beyond the lockdown month, it was the lowest sales rate since 2014, down 29% from October 2020 (historical data shows Y-chart):
Single-family home sales fell 0.9% from July to August, down 19% year-on-year to a seasonally adjusted annualized rate of 4.28 million units.
Condo and co-op sales increased 4% from July to a seasonally adjusted annualized rate of 520,000, down 25% year over year.
Compared to August of last year, sales were down 20%, marking the 13th consecutive month of year-on-year declines. It is based on the seasonally adjusted annual sales rate (historical data from YCharts).
Sales by region: Significant decrease in sales in all regions compared to the same period of the previous year. On a month-over-month (mom) basis, 2 of the 4 regions show slight increases.
- Northeast: +1.6% Mum; -13.7% YoY.
- Midwest: -3.3% Mom; -15.9% YoY.
- South: 0% mothers; -19.3% YoY.
- West: +1.1% Mom; -29.0% YoY.
Sales fell across all price tiers, but fell most in the lower price tiers.
With potential sellers clinging to their hopeful prices last year when mortgage rates were 3%, sales are low and many are hoping to keep their homes out of the market or out of the market. is. can. However, the price is currently being lowered by sellers who want to sell.
price cut It began to surge in May from record lows last winter and spring as sales stalled and mortgage rates soared. In July, he reached his highest level since 2019, according to data from. realtor.comAugust markdowns dipped slightly as sellers may have felt less needed to cut in the midst of lower mortgage rates in July and August and the Fed’s pivot fantasy.
active listings – Total inventory, net of properties for sale – increased to 779,400 units in August, the highest since October 2020 and up 27% from a year ago, according to data from realtor.com.
The National Association of Realtors is pushing hard to build single-family homes. However, home builders they Struggling to sell a house you’ve already built or are building, Sales plummet, inventories surge to highest level since 2008When Homebuilders have started cutting prices, lowering mortgage rates and piling up other incentives Move inventory.
Investor or Second Home Buyer NAR data showed the homebuying rate rose to 16% in August from 14% in July, but down from the spring and winter range of 17% to 22%.
“All Cash” BuyersIt made up just 24% of total sales, with a share of 25% to 26% from April to June, including many investors and second-home buyers.
Ahead: Holy Mortgage Rates. After dropping from 6% in mid-June to 5% in mid-August, mortgage rates are now firmly above 6%.
According to Mortgage News Daily, the average 30-year fixed mortgage rate is measured daily at 6.47%.
Freddie Mac’s Weekly Index, released last week, showed mortgage rates more than doubled to 6.02% from a year ago, based on mortgage rates earlier this week. These 6% and above mortgage rates are still very low considering the consumer price index is over 8%. But they are catching up.
And potential sellers who continued to buy homes in July and August didn’t want to match buyers’ prices, hoping the “pivot” fantasy would push mortgage rates even lower. face the impact of 6% of Plus Mortgage Interest Rate:
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