Fox Business’s Gerri Willis explains that rising home prices and lower inventories have discouraged many homebuyers from buying at The Claman Countdown.
Pending home sales fell in February for the fourth straight month. This is because buyers choose fewer homes, higher prices, and higher interest rates.
On March 18, 2022, a sign for sale is posted in front of a home for sale in San Rafael, California. (Photo by Justin Sullivan / Getty Images) ((Photo by Justin Sullivan / Getty Images) / Getty Images)
According to the latest data from the National Association of Real Estate Agents, contract deals fell 4.1% from January last month, down 5.4% year-on-year, with declines in all four regions of the United States.
Mortgage repayments decreased by 50% year-on-year
Lawrence Yun, Chief Economist at NAR, said: “Buyer demand is still high, but it’s as simple as” you can’t buy what isn’t for sale, “he said.
Home inventories were the lowest ever this month, and mortgages were close to record highs, despite interest rates above 4%. As of February, average mortgage payments were 28% higher than in the same month last year.
Homes under construction and for sale are on display in Roswell, Georgia. (AP Photo / John Bazemore, File) (AP / AP Newsroom)
Rate hikes and high prices make first-time homebuyers “frustrated”
“Keeping income constant at February 2021 levels will result in a 95 basis point increase from February 2021 to February 2022, resulting in a home-buying power of about $ 53,000,” said Odetakushi, Deputy Chief Economist at First American. It has declined. ” “Some buyers priced from the housing market are experiencing double-digit home price increases and interest rate increases.”
Yun predicts that this year’s home sales will be down 7% compared to last year, and that the rest of 2022 will be around 4.5% to 5%.
There is a sign sold in front of the house in Brighton, NY (AP Photo / Ted Shuffle, File) (The Associated Press / Associated Press Room)
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“It’s still a very competitive market, but there are fast-changing conditions for affordability ahead,” he said. “As a result, homeowners cannot simply raise prices in the coming months, but they need to assess changing market conditions to attract buyers.”