Average property has increased 9% since the start of 2022: US Housing Market Starting To Shift Back To Buyers today


According to Redfin, the housing market is showing minor but significant signs that the balance is swinging back to buyers from sellers. During the week ending May 29th, its seasonally adjusted Homebuyer Demand Index fell 9% year over year. The index, which tracks requests for tours and other home buying services from Redfin agents, fell for the eighth day in a row. One of the critical reasons for customers’ withdrawal from the market is the rise in mortgage rates.

Meanwhile, the number of homes for sale increased to 608,841 in May, a record high for the year. However, this was a 10.1 percent drop from last year, and a minor dip since April 2020, when the pandemic began. Redfin also reports that the median sales price for the four weeks ending May 29 was $400,999, up 16 percent year over year. Newly listed properties had a median asking price of $412,450, up 17 percent. We can add property value increase to another reason for buyer demand falling.

According to a HouseCanary survey, real estate agents and sellers put 332,965 net new listings on the market in May, down 16.6% yearly. Inventory dropped the most at the lower end of the market, with house listings under $200,000 down 27.4 percent from May 2021. The number of listings in the $200,000 to $400,000 range fell by 26.9%. HouseCanary CEO Jeremy Sicklick said that listings that entered contract in May were down 10.9 percent from a year ago, indicating that the market is cooling.

Mortgage Holders Gain $1.2 Trillion in 1Q Tappable Equity

Black Knight of Jacksonville, Florida, reported that the least affordable housing market in nearly two decades has at least one windfall: the average property has increased about 9% since the start of 2022, with homeowners collecting more than $1.2 trillion in equity in the first quarter. This is on top of the record price appreciation since the pandemic’s start.

Mortgage holders saw their overall tappable equity — the amount available to borrow against while maintaining at least a 20% ownership stake in the home – rise by $1.2 trillion in just the first quarter of 2022. Over the last year, mortgage holders gained $2.8 trillion in tappable equity, a 34 percent increase that translates to more than $207,000 in equity available per borrower.

CoreLogic: Home Price Appreciation Near 21%

Home prices nationally, including distressed sales, rose 20.9 percent year over year in April, according to CoreLogic of Irvine, Calif. Home prices grew by 2.6 percent month over month in April, according to the company’s monthly Home Price Index. 

In April, home prices in the United States rose for the 123rd month in a row, setting a new high year over year. Rising mortgage rates fueled buyer eagerness and price increases, with nearly 70% of homes in the United States selling for more than their asking price this spring. Higher mortgage rates, on the other hand, are expected to slow buyer demand in the following months, resulting in an annual home price appreciation of 5.6 percent by April 2023.

“The record growth in home prices is a result of a scarcity of for-sale inventory coupled with eager buyers who want to purchase before mortgage rates go higher,” said CoreLogic President & CEO Patrick Dodd. “Buyers who closed on their home in April had locked in their mortgage rate in February or March when rates were lower than today. With 30-year fixed mortgage rates much higher now, we expect to see waning buyer activity because of eroding affordability. As a consequence, our forecast projects slowing price growth over the coming year.”

Next week’s potential market-moving reports are:

  • Monday, June 13th – NY Fed Inflation Expectations
  • Tuesday, June 14th –NFIB Small Business Index, Producer Price Index
  • Wednesday, June 15th – NAHB Home Builders Index, FOMC Statement    
  • Thursday, June 16th – Initial Jobless Claims, Building Permits, and Housing Starts
  • Friday, June 17th – Leading Economic Indicators

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (800) 216-1047.