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The Decline In Home Prices Makes Up For The Increase In Mortgage Interest Rates

Good Monday Morning!

Home sales in the Eugene and Springfield area and nationally continue to decline in October.  As inflation numbers continue to remain dangerously high and mortgage interest rates remain much higher than at the early part of the year the number of homebuyers in the market continue to drop. There has been a recent decline in mortgage interest rates, which hopefully will bring about an immediate surge in home purchases, but other than this the trend of slower home sales may continue indefinitely.  When one door closes two more open.  Just as mortgage interest rates increase, home prices have declined.  Also, the hot sales market of the last few years is gone.  There are more homes for home buyers to choose from and the days of bidding wars and paying well above asking price are gone. The days of sellers willingnes to do repairs and pay for buyer closing costs are back.  I am seeing many sales where the buyers final purchase deal makes up for the increased interest rates.  If you are considering purchasing a home, don't get out of this market, you just may be able to purchase a home for far less than you think!  The following is an article from "Raltor.com" that goes over the current national home sales market.

The numbers: Existing-home sales fell 5.9% to a seasonally adjusted annual rate of 4.43 million in October, the National Association of Realtors said Friday. Compared with October 2021, home sales were down 28.4%.

Economists polled by the Wall Street Journal had expected a decrease to 4.37 million units.

The level of sales is the lowest since December 2011 excluding the 2020 pandemic.

This is also the ninth straight monthly decline in sales, the longest streak on record.

Key details: The median price for an existing home was $379,100 up 6.6% from October 2021.

But price gains are decelerating. Prices were up over 20% on a year-on-year basis earlier this year.

Housing inventory fell 0.8% to 1.22 million units in October. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months a year ago.

A 6-month supply of homes is generally viewed as indicative of a balanced market.

Sales declined in all regions of the country.

Big picture: Home sales have dropped as mortgage rates have risen sharply and affordability has dropped.

Softer inflation data in October have led to a drop in mortgage rates, which could lead for a floor on sales.

At the same time, Federal Reserve officials may pencil in a “peak” interest rate above 5% at the policy meeting next month.

Economists see home prices have further to fall in this market.

What the NAR is saying: Home sales have been very low and the softness could continue for a few months. But sales could pick up early next year if the mortgage rate has peaked, said Lawrence Yun, chief economist at the NAR.

The numbers: Existing-home sales fell 5.9% to a seasonally adjusted annual rate of 4.43 million in October, the National Association of Realtors said Friday. Compared with October 2021, home sales were down 28.4%.

Economists polled by the Wall Street Journal had expected a decrease to 4.37 million units.

The level of sales is the lowest since December 2011 excluding the 2020 pandemic.

This is also the ninth straight monthly decline in sales, the longest streak on record.

Key details: The median price for an existing home was $379,100 up 6.6% from October 2021.

But price gains are decelerating. Prices were up over 20% on a year-on-year basis earlier this year.

Housing inventory fell 0.8% to 1.22 million units in October. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months a year ago.

A 6-month supply of homes is generally viewed as indicative of a balanced market.

Sales declined in all regions of the country.

Big picture: Home sales have dropped as mortgage rates have risen sharply and affordability has dropped.

Softer inflation data in October have led to a drop in mortgage rates, which could lead for a floor on sales.

At the same time, Federal Reserve officials may pencil in a “peak” interest rate above 5% at the policy meeting next month.

Economists see home prices have further to fall in this market.

What the NAR is saying: Home sales have been very low and the softness could continue for a few months. But sales could pick up early next year if the mortgage rate has peaked, said Lawrence Yun, chief economist at the NAR.

Have An Awesome Week!

Stay Healthy! Stay Safe! Remain Positive! Trust in God!

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AND HERE'S YOUR MONDAY MORNING COFFEE!!

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