Home Sales Sink And Payments Rise
It’s the data everyone has been expecting. What goes down must go up — call it economic physics; interest rates could not stay at 3% forever. Of course, this is explanation enough for the sizzling market, expressed as raw, purchasing power for many buyers, a boon for sellers. Now, according to Jonathan Ladner, columnist for the OC Register, sales have sunk 25% from this same month (June) a year ago, and payments have spiked 44%.
Last year at this time, the average rate was 3% as compared with June 2022’s average of 5.24%. All of this, of course, has brought about a change in the market climate. Many expect inventory to swell; maybe not. Rise, yes. But remember, many sellers in this past tight market were “optional” sellers; people specifically cashing in on a lucrative market and putting hundreds of thousands of extra dollars in their pocket, and they really didn’t have to sell. They chose to sell. We can expect that type of seller to disappear, leaving us with the usual motivations, i.e., relocation, empty nest retirements, out of state moves, divorce, death, move ups and move downs. It could be that inventory improves, but not as much as one might think. Prices will have to reflect however, in some fashion, buyers newly limited purchasing power, based on rates.
Please give us a call at Premier Funding Network to answer any of your mortgage questions, 714-283-9900.