October 29, 2023
You wanna talk about a toxic situation?
No – we’ll talk about our exes another time…
I’m talking about the housing market.
If you’re looking to buy a house or sell a house right now you probably feel this toxic mix of high mortgage rates, high prices, high demand and tight supply. Like – everything’s going in the wrong direction.
And the numbers back up all of that. And before i share the actual numbers with you i want to thank my TikTok subscribers for voting for this story as the bonus for this week. If you want to vote too the only way to do that is to subscribe to my page during my next live even or you can just follow these steps and subscribe to my page right now.
Ok – let’s jump into this toxic sludge – shall we?
Starting with mortgage rates. Here is the chart of the most popular mortgage rate – the 30 year fixed – for the last three years. Starting right here in the middle of the pandemic October 29 of 2020 – you could get a 30 year fixed mortgage rate for 2.81%. But follow the blue line it stays steady through December of 2021 and then it starts to sky rocket. And it just keeps going up and up and up until you get to this week when the rate for a 30 year fixed mortgage hit 7.79% which is the highest we’ve seen in about 23 years.
Now let’s talk about home prices. According to the National Association of Realtors — the median price for an existing single-family, townhome, condo or co-op home increased across the country– again in September to $394,00. That’s 2.8% more than September of 2022 and the third consecutive month of year over year increases. By far – the most expensive existing homes by far were in the West where the median existing home price in September was $606,100, the second highest prices were in the Northeast where the median existing home was almost $439,900, third highest was the South where the median price for an existing home was more than 360,500 and the lowest was the Midwest where the median price was $293,300.
As for the supply of existing homes on the market – the National Association of Realtors says it’s true – the number of existing homes on the market and available in September increased 2.7% from the month before – but that number is down 8.1% from September of last year. A lot of that is because homeowners don’t want to give up their 2 or 3% mortgage rates so they’re just sitting on their homes instead of selling.
And that’s the thing – these high mortgage rates are definitely shutting out a lot of potential buyers – especially first-time home buyers, but this chronic shortage of homes for sale continues to keep prices high. It’s a vicious cycle. When it will end? I don’t have a crystal ball – all I can tell you is the Federal Reserve has said it plans to start cutting interest rates at some point next year – but not by as much as they originally thought because this inflation isn’t coming down fast enough.
Mortgage Rates from Freddie Mac here.
