Fannie Mae’s Home Price Sentiment Index reported that in July it fell to 62.8; this is its lowest level since 2011. The report indicates that a small percentage, 17% of respondents, felt that it was a good time to buy a home in July. This was slightly down from 20% of respondents saying that they felt that it was a good time to buy a home in May 2022. Because of the escalation in the price of real estate overall, over 3/4 of all respondents responded by saying that it was a bad time to purchase a home.
Obviously, the effects of the last housing crisis crash back in 2007-2008 is giving buyers some trepidation over the high price of real estate today. The other factor contributing to this negative sentiment is the fact that mortgage rates have basically doubled over the last two-and-a-half years, making it nearly twice as expensive to finance a new home purchase.
Most of the buyers in the market are first-time buyers; and many baby boomers are looking to sell at this point buyers are finding the selection and option of homes available are limited. Most markets are reporting the months available of inventory is in the neighborhood of two months’ supply. Nearly 40% of respondents felt that home prices will continue to rise over the next 12 months, which is down slightly from 44% from June 2022. But as rents continue to escalate, some of these individuals may be forced to purchase a home but at a higher price.
Over the last few weeks interest rates have been easing. Less than a year ago, in November 2021, the 30-year fixed rate for a mortgage was 3%. As of the writing of this blog, the average 30-year fixed-rate mortgage is at 4.99%.
Offers Being Pulled
Many people within the market are reporting that a large number of offers are being withdrawn, indicating that buyers are no longer seeing today’s market as being a seller’s market only. The market may be transitioning into more of a level playing field. The concern is that this appreciating market may take a while to level off, and buyers may not have the luxury to wait until prices come back to earth.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.