The typical U.S. home value was nearly flat from September to October (+0.1%), as buyers and sellers potentially settled on a new market equilibrium.
Mortgage Rates Enjoy a Calm Period, but Choppier Waters are Likely Ahead
Mortgage rates ticked up slightly this week and enjoyed a period of relative calm, as markets eagerly anticipated Federal Reserve policy updates and gauges of the economy for where to head next. But more pronounced movements are likely in the coming days.
Housing Inflation is Likely Poised to Decelerate by Early 2023
A growing body of research shows the Zillow Observed Rent Index (ZORI) leads survey-based average rent indexes, including the rent component of the Consumer Price Index, by up to 12 months.
The typical age of inventory is up 45% from last year, and is 30% less than the pre-pandemic average.
Mortgage Rates Reverse as Investors Expect Moderation
Mortgage rates fell this week, touching 20-year highs before retreating considerably in recent days. The sharp reversal over the past few trading sessions – a rarity these days – suggests that investors may finally be expecting some moderation in the Fed’s pace of monetary policy tightening and some softening in key economic data releases – the two factors that have combined to push rates firmly higher this year.
September New Home Sales: New Sales Back Down With Rates Climbing
Mortgage rates spiked in September, leading to a slowdown in new construction sales compared to August when rates took a slight dip down.
August 2022 Case-Shiller Results & Forecast: Cooling Fall
Home values continued to fall in August as affordability took hold of both buyers and sellers. The impact was not as intense as it could have been given the slight reprieve in mortgage rates in August, which briefly dropped below 5% and helped to bolster sales counts. But that was short lived leading into September and October with much higher rates and more affordability concerns.
Spooky Season is Here to Stay: Mortgage Affordability May Never Recover
Housing affordability has become the highest barrier for both buyers and sellers in today’s housing market. Throughout the pandemic, as prices were rising to never-before-seen heights and inventory plummeted to their lowest level in at least 40 years, low mortgage rates helped keep monthly payments affordable for most home buyers who could afford a down payment. But now that rates are soaring, that monthly payment is climbing out of reach for many.
