Last week, we provided market statistics related to the local market. 

This week we’ll provide information about the national market. 

Realtor.com released their July Housing Market Report. Here’s what Sabrina Speianu, Economic Data Manager, had to say, 

“Realtor.com®’s July housing data release reveals that the housing market is continuing to move toward more balance. Inventory levels continue to rise, providing more options to homebuyers who are still actively looking for a new home and price reductions are also increasing, as sellers adjust to the new normal. However, housing remains expensive and fast-paced with the median asking price close to June’s all-time high while time on market is still slightly lower than last year and significantly lower than pre-pandemic levels. Although demand has softened greatly compared to last year, housing activity remains robust compared to pre-pandemic levels.”

Top takeaways from the report are:

• Less Frenzy Means More Options for Those Still Looking to Buy a Home
• Time on Market Higher Than Last Year in Many Metros, but Homes Are Still Moving Historically Fast in General
• Signs of Softening Price Growth Are Emerging

Click here to read the entire Realtor.com July Housing Market Report

What we learned this week:

• Mortgage purchase applications are down 18% 
• New home sales declined 17%
• Introduction of single family homes declined by 16%

What’s that mean?

Even though we saw declines, we are still not in a balance market. 

Brian Neeley with BusinessNews says, “Inventory levels remain 49% below July 2019 levels, giving most sellers enough leverage – at least for now – to hold off on a bottom-market selloff earlier this year.”

Every quarter, Moody’s Analytics calculates an “overvalued” or “undervalued” figure for approximately 400 markets. The firm aims to find out whether fundamentals, including local income levels, can support local home prices. 

In the first quarter of 2022, Moody’s estimated that the average regional housing market was “overvalued” by 23%.

Moody’s Chief Economist Mark Zandi said Good luck The housing market being “overvalued” by more than 25% is likely to see a 5% to 10% drop in home prices. If a recession occurs, prices in those markets could fall by as much as 15% to 20%.

Click here to read more about Zandi’s predictions! 

Is the power shifting in the market?
Taylor Marr, the deputy chief economist at Redfin, says, “As sellers adjust their behavior it’s already changing the housing market.”

“The housing market isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high,” Marr said in a statement to Insider, adding that a lot of home sellers are already beginning to drop their asking prices.

Will home prices come down quickly?
NextAdvisor produced an article this week that says, “Experts say it’s unlikely prices will drop in any significant way nationwide anytime soon. And while the rate at which home prices are rising will slow, that’ll likely come because fewer people can afford to shop in a pricier market. On a local level, individual markets might see prices come down, but experts say a big drop across the board is unlikely barring a big economic shift.”

The Joint Center for Housing Studies of Harvard University published The State of the Nation’s Housing 

The report is very interesting, but a bit dense, so we compiled a few of the most interesting pieces (with page number references) below!

Housing construction at an all time high (page5)

“Single Family stats hit 1.1 million in 2021, exceeding the million-unit mark for the first time in 13 years. Multifamily starts were also at a 30-year high of 470,000 units. The last time housing production was nearly as high was 1973.”

The outlook (page 8)

“Assuming that the Federal Reserve can take runaway inflation without causing a series downturn, the near term outlook for housing demand is largely positive. Demographic shifts are favorable, unemployment is low, and wage growth remains strong. Conditions on the supply side are also encouraging, with supply-chain delays diminishing and a record number of homes set for completion in the coming months.”

Home Price Appreciation Set New Records in the Past Year (Page 9)

“This song trajectory left home prices 38.6% above their early 2020 level and more than double the 2012 low. Indeed nominal home prices stood 59.5% above the mid-2000s peak early this year while the real home prices were up 14.4%.”

For sale inventory at an all time low (page 11)

“Fewer existing homes were available for sale in January 2022 than at any point since the late 1990s.

Home Equity Growth (page 27)

Housing Challenges (page 37)

Section 6 of the The State of the Nation’s Housing  presents some of the challenges we may face in the future.

Click here to read the entire State of the Nation’s Housing Report.