Zillow Home Value and Sales Forecast: September 2022
Zillow expects home value growth to slow considerably over the next year, from the current rate of 14.1% annual growth to 1.4% growth over the coming year. This is a downward revision from August’s year-ahead forecast of 2.4% home value growth.
Lack of affordability drives further price declines as rebalancing continues
Mortgage Rates Stay Flat as Inflation Persists
While interest rates continue to be volatile as markets adjust expectations for Fed rate hikes, mortgage rates ended the week basically unchanged at about 6% for a 30-year fixed rate loan. Economic data and comments from Fed officials last week point to the Federal Reserve continuing to raise the Fed Funds rate until inflation is under control.
More Pending Homes Are Falling Through, but No Need to Sound the Alarms
The share of contract cancellations — pending listings that have gone back on the market without a sale — has recently increased, but remains in line with pre-pandemic norms. The recent increase in contract cancellations is more evidence of a rebalancing in the housing market that has both eased buyer demand and given buyers who remain in the market more negotiating power than they have had for most of the pandemic.
Mortgage Rates Move Higher as Fed Commits to Containing Inflation
Fed Chair Powell noted late in the prior week that the Fed is committed to containing inflation, which will likely result in some economic pain. While data is pointing to easing pressure on prices in several sectors, the level of economic activity appears to give the Fed more runway to raise rates before triggering recession risk.
June 2022 Case-Shiller Results & Forecast: Moving Towards Rebalance
The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 18% year-over-year in June (non-seasonally adjusted), down from 19.7% in May.
Mortgage Rates Rise on Robust Economic Activity
Mortgage rates moved higher again last week. Fed Chair Powell noted late in the prior week that the Fed is committed to containing inflation, which will likely result in some economic pain.
Sales Up, Size Down for $1 Million Homes
The typical million-dollar home has shrunk in size across nearly all major metropolitan areas
Today’s ARM Borrowers Have Higher Incomes, Larger Down Payments
Adjustable-rate mortgages rose in popularity in the first half of 2022, bringing the share of adjustable-rate mortgage applications to the highest it’s been in 15 years
Mortgage Rates Increase on Stronger Economic Data Than Anticipated
Mortgage rates increased last week. Economic data releases showed stronger economic activity than markets anticipated; continued tight labor markets, resilient consumer spending and strong manufacturing activity. Fed officials continue to message to investors that they are committed to getting inflation under control.
