For over a year, historically low-interest rates have been driving the housing market and turned it into a home seller’s windfall. But despite these record-high property values, new listings have exceeded the levels from 2019 and jumped 4% for the 4-week period that ended on Independence Day. Although sales remain vigorous, the amount of time that a listed home spends on the market has flatlined at 17 days as has the number of homes that are selling for more than their list price.
Is it Time To Start Looking Again?
With more listings and mortgage rates still sitting at record lows, buyers who gave up shopping for a home may want to consider rekindling their search as things appear to be shifting in their favor. As of late, the appreciation rate has taken some of the pop out of the recent housing boom. Prices jumped nearly 14% for the one-year period ending June 30th, while mortgage loan applications decreased roughly 7%. We also witnessed purchase applications hit a 17% slump during that time. However, those looking for a house to buy can still look at the current prices and see if that meets their needs.
Additional Market Information
Despite some of the market woes, pending home sales for the month of May jumped a surprising 8%. “Pending” in this case refers to purchasing contracts signed. So it looked as though the numbers were lagging a bit. Furthermore, construction spending decreased slightly that month by $1.545 trillion, a decrease of 0.3% from the previous month. However, it was still 7.5% higher than May of 2020. That was roughly when the pandemic housing boom started and caught numerous home builders by surprise.
Fortunately, the construction industry caught up somewhat since then as private funding for residential properties reached an adjusted rate of $752 billion in May with single-family homes accounting for over $402 billion of the total. Interestingly enough, there seems to be a concern with affordability as home prices climbed to a record-high $353,000 in June, an increase of 24% over June of 2020. However, the 2021 housing market outlook is somewhat uncertain because:
- the pandemic initially delayed the homebuying season
- the boost attributed to stimulus check payments kept housing sales hot
As these factors start to dissipate, the demand may drop off. This is due to consumer preference always being uncertain to a degree because of the effect that increasing home equity and labor forces have on the situation. This is something to consider.
Contact Mortgage Specialist in California
Call our business representatives today to learn more about trends in the housing market, call Granite West Funding at 559-540-2275 today. We are here to help you.