https://www.cnn.com/2023/04/20/homes...les/index.html
“Homes sales fell in March, reversing gains.”
“Annually, sales were down 22% from a year ago and the seasonally adjusted annualized sales pace dropped from 5.69 million units a year ago to 4.44 million in March.”
Just as I mentioned before on home prices, where prices have come down, BUT they are still higher than pre-pandemic levels due to the surge in price during COVID from low rates, this is the same concept for the number of applicants. With very low rates, mortgage apps surged and started coming down as rates went up, but I would conclude this number would be the same/higher than pre-pandemic levels.
The media is reporting less mortgage apps and less qualified buyers. If home buyers only qualify if rates are in the 2% range and otherwise don’t qualify, then they are NOT true qualified buyers. A 2% range rate is NOT a realistic/normal rate. And buyers that are qualified for less are NOT qualified for less, but rather the amount they normally should qualify for anyway. In the early 1980s, rates were in the 15-19% range. Incomes have significantly grown since (and yes, I understand inflation has gone up since too), but buyers are complaining about the 5-8% range?
“Inventory remains stubbornly low, said Yun, but it is improving some.”
Um, we are about 15 years behind on building since the housing market crash. With rates rising, builders are less likely to take out construction loans to build if the sales data does not justify it.
“Many potential sellers feel “locked in” by their ultra-low existing mortgage rates that they bought or refinanced into over the past few years.”
This is another issue that many sellers will face and will add to the shortage issue. Homeowners with the 2% range rates are unlikely to sell and upgrade because of payment shock from the rate they will get for their next home. That and the likelihood they would qualify for less of a loan amount with the increased rates.