August results are in!
Home sales slowed, and we are still in a seller’s market
Mortgage rates are up and we have seen home sellers take price reductions we haven’t seen in years. As a result, if you are looking to buy a home, in many markets you can now get way more house for the total purchase price, than just 5 months ago (something we are definitely seeing in high-end Bay Area markets in particular).
And – apparently a lot of homebuyers realize this, as quality home inventory remains very tight! FAR TIGHTER than what we saw prior to the 2008 crisis!
August 2022 home sale results:
- Sales were expected to drop 2.5% month over month, but instead fell only 0.4% from July 2022
- Long story short: Sales slowed down WAY LESS than expected, despite much higher rates
- Sales are down 20% year over year, but that is compared to near record numbers last year
- Months of housing supply in the Bay Area Markets: 1.9 months
As a reminder: a healthy supply of inventory is 6 months of inventory. So, we are not even close to an oversupply of homes for sale – which is necessary for major price declines to occur
HERE’S WHY HOUSING INVENTORY IS STILL SO TIGHT
- Mortgage Rate “Lockdowns”. Home owners are remaining in their homes and not selling because they do not want to give up their sub-3% rates that they secured during the pandemic.
- No Foreclosures. We are not and will not see a wave of foreclosures to add to supply because homeowners have so much equity and because lending guidelines have been so much tighter.
- Household Formations Exceed Household Creations. New households are being created much faster than new homes are coming available. This shortage is often more than 500,000 units annually.
* source: JVM mortgage lending daily blog
WITH THE HOUSING MARKET NOW MORE STABLE, HAVE YOU RECONSIDERED BUYING A HOME?
While rates are higher now, it is deterring a lot of would-be homebuyers, which is creating buying opportunities. Mortgage rates are bound to decrease again in the future, and when they do, you can easily refinance into the lower rate, knowing that you acted and secured a home at this year’s pricing, when others will have to pay even more for homes, because they either had to or chose to wait longer.
Avoid this common homebuyer mistake: watch my short video about 20% down and mortgage insurance
WE ARE HERE TO HELP
With all that is happening in our world right now, let’s have a conversation with you about your unique of situation. Financial stability becomes more of a focus during these uncertain economic times, and no two situations are exactly the same. As CPAs and dually licensed Realtors, our team has deep financial and real estate expertise and we are uniquely skilled to help you navigate your family’s housing needs.
If your current housing situation no longer meets your family’s needs, reach out to us for a strategy session, where we can help you evaluate your options. We have access to local lending programs with interest rates well below what you see published online and in the news.
I also wanted to dedicate a moment for us to think about the hurricane victims in Florida. Prayers for safety and support as so many impacted families have to rebuild their lives.