home buyer Focus on housing market plunge Continue to face bad news. Interest rates have risen to unprecedented levels and this is impacting mortgage rates.
Still, it created a fascinating trend buyer’s marketThe National Association of Home Builders/Wells Fargo Home Market Index report says homebuilders expect home prices to fall “another 20%” this month. This is the lowest level NAHB has seen since his 2012, discounting the 2020 pandemic-time plunge.
September was the eighth straight month of price declines in the US, according to the NAR. This is his worst drop since October 2007, when the subprime mortgage market collapsed.
If we weigh these two phenomena, mortgage interest rate And home prices – 2022 may actually be the perfect time to jump into the housing market.
Do not miss it
Prices drop in expensive cities
Two-thirds of the region’s major housing markets, or 98 out of 148, continue to experience price declines, especially in more expensive locations.
The overvalued market could fall further, and if that happens sooner or later, it would be a great opportunity to buy into the overvalued market. This probably wouldn’t have been registered even a few months ago.
It is difficult to predict whether this will occur.If so, whether the price decline is offset federal rate hike It is almost certain to arrive within the next few months.
The only way to know for sure is to wait until the next rate hike starts.
In the meantime, remember, as with any investment, the best time to buy is usually when prices are low.
Homeowners are not in dire straits
The outbreak of the pandemic could have been devastating for the housing market if millions of homeowners were forced to default on their loans.
Fortunately, a mortgage moratorium program allowed struggling borrowers to suspend payments until they got back on their feet. Mortgage balances stood at just 0.5%, a historic low.
In the first quarter of 2022, the delinquency rate was just 2.13%, compared to 2010, when the delinquency rate for single-family homes reached a 30-year high of 11.36%.
As of June, 2.7% of outstanding debt was in arrears, reaching $435 billion in delinquencies. That may sound like a lot, but it’s down 2% from pre-pandemic numbers.
Moreover, rising house prices have led to an increase in the wealth of homeowners. Home prices started to fall slightly, but by the end of the second quarter, the mortgage holder had his $11.5 trillion tappable his equity, and mortgage technology and data his According to provider Black Knight, this is his 10th consecutive high.
And even if the numbers reflect Real estate market may be slowing downBlack Knight notes that given that the market’s total leverage (including both first and second liens) was only 42% of the value of mortgaged homes, “the market is on a strong footing to weather the correction.” There is,” he added.
Oversupply in 2008, but less supply here
for those who are afraid Repeated financial crisis of 2008 It rocked American banks, rest assured. Even the economic crisis caused by the pandemic has left many homeowners relatively unscathed.
Mortgage lenders have introduced programs to suspend payments as some owners have been plagued by default on their loans. Mortgage balances hit a historic low, pegging 90-day delinquent loans at just 0.5%. This is a far cry from his 11.36% in 2010, when the American had trouble paying.
As noted by the Harvard Business Review, if home prices rose across much of the United States, homeowners would enjoy more assets and be in better financial shape.
Compare that to 2008, when the housing crash and oversupply drove home prices down and sold at least one Detroit homeowner for just $1.
NAHB Chairman Jerry Konter said, “With mortgage rates approaching 7%, demand has weakened significantly. This situation is unhealthy and unsustainable.”
So 2022 could be the lowest price for a while.
Does that mean moving is the best option? Between house prices and mortgage rates, let’s first see how the economy moves.
what to read next
Is inflation eating your budget? Here are 21 things you should do Never buy at the grocery store if you want to save money
The United States is now 25 days diesel supply — Lowest since 2008. This is why it’s more alarming than the decline in the ‘oil piggy bank’.
‘It’s not the time to be greedy’: Homeflippers are now burning by the U.S. housing market slump, cutting prices to cut losses — here are two big reasons
This article is for informational purposes only and should not be construed as advice. It is provided without warranty of any kind.