Townhouses winning as single-family home price is up. Expert anticipates a 25% drop in existing-home sales between February and summer

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Purchase Applications Remain Resilient While Refis Keep Sliding

Interest rates and mortgage refinance demand have a solid and predictable relationship. Rates rise, refinances fall. Rates are highest in years, but refis are lowest in years. That’s a scenario that’s been unfolding since mortgage rates hit their most recent notable low in August 2021. However, the drop in refinance activity has been relatively linear, with activity only recently reaching long-term lows in 2018. According to the Mortgage Bankers Association’s weekly application survey, refi applications fell 14% in the most recent week, marking one of the steepest drops in this recession cycle.  Read More

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First-time home buyers caught in the middle. Rent cost is up so is the cost of purchasing a home. Check this now!

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Housing Affordability the Lowest Since 2008

It has become challenging for first-time buyers as they are getting caught between rising rents and the cost of purchasing a home. As home prices continue to rise, buyers are faced with either increasing their budget for purchasing or potentially lowering their standards for the home they purchase.

According to the National Association of Realtors, first-time buyers represented 27% of existing-home sales in January. With mortgage rates above 4% and the highest they have been in three years, buyers with limited funds and budgets for housing are being priced out of the market.

The pandemic created a buying frenzy as the combination of record-low mortgage rates with people’s need for more living space to work remotely. At the same time, housing inventory plunged, and new construction was severely constrained due to supply chain disruptions. Read More

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National Association of Home Builders say seven out of ten households in today’s market cannot afford a median-priced home.

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Why Some Owners Are Staying Put

New affordability estimates reveal why there are so few houses for sale: owners who wish to sell may not afford to buy another home even if they could locate one.

As per the National Association of Home Builders, approximately seven out of ten households in today’s market cannot afford a median-priced home. Under typical underwriting criteria, the earnings of 87.5 million families are insufficient to qualify for loans. Worse, for every $1,000 above the average rent, 118,000 more households are priced out, one of the main reasons so many people remain put. Of course, it’s more complicated than simply selling one home and purchasing another. For starters, there’s the expense of selling, which can chip into the earnings you’d intended to put toward your future home. The process of purchasing a home is also not inexpensive. Then there’s the enormous expense of relocation. And if you’re caught between two transactions — selling your old house and buying a new one — you can find yourself with two mortgage payments for a while. Read More

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