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%.