Home Sales & Starts Dip - June 13, 2022 | Jordan Dove's Market Pulse
Home Sales & Starts Dip
For the week of June 13, 2022
Home Inventory Grows
“The shortest way to do many things is to do only one thing at once.”—Samuel Smiles, Scottish author
PSA: Please excuse the two week hiatus! I travelled coast-to-coast with the family the past 20 days in a mini-van! I highly recommend you do that at least once in your life - your perception of reality will be altered.
All statistics this week will be based on a 3 week spread.
Realtor.com has reported a significant turnaround in the number of homes for sale. For the week ending June 4, active inventory rose to 13% above a year ago, with the new listings part of that inventory up 2% from a year ago.
Nevertheless, Black Knight found there are just two months of inventory of single-family homes across the top 100 metros in the country, a historic low. They say four to six months of inventory puts a market in equilibrium.
Freddie Mac: "as mortgage rates increase…the material decline in purchase activity, combined with the rising supply of homes for sale, will cause a deceleration in price growth to more normal levels, providing some relief for buyers.”
May 2022 saw another record breaking month for the median price of single-family homes. The previous record of $475,000 from April 2022 was eclipsed in May to $482,000 - up 1.5%. The median price was up 25.2% or $97,000 from a year earlier.
Available residential inventory has risen by 25.42% the past 3 weeks, with an increase of 1,257 more properties compared to the week of May 23, 2022 market update. The past seven days saw a surge in more affordable housing, with single family inventory adding a 27.68% increase in inventory. A surge of rentals have become available on the market with a 12.07% increase.
With higher interest rates and more properties available on the market (about a two months supply), we are seeing an increase in price decreases. Although it is still a strong seller’s market, we are seeing some softening which is good news for home buyers as they will have more available options with less competing buyers.
The past thirteen weeks have seen consistent growth of properties coming on the resale market.
As of June 13, 2022, there are currently active (%’s compared to 3 weeks ago):
4,506 Single Family Homes +27.68%
617 Condos +22.18%
424 Townhouses +29.66%
192 Manufactured Homes +16.36%
388 High Rise Units +13.78%
74 Multiple Dwellings -3.89%
2,169 Parcels of Land -2.08%
2,126 Rentals On Market +12.07%
Past Seven Days Market Watch (%’s compared to 3 weeks ago):
1,264 New Listings +6.31%
259 Back On Market +14.60%
92 Price Increases -25.20%
980 Price Decreases +57.30%
1,014 Accepted an Offer +0.60%
806 Sold -15.07%
45 Expired +7.14%
238 Taken Off Market +1.71%
142* properties are coming soon -4.05%
As of June 13, 2022 there are 1,257 more active residential resale properties on the market compared to three weeks ago, an increase of 25.42%.
*Properties coming soon do not indicate all of the upcoming properties. These are listing that are entered into the MLS prior to list date.
INFLATION CATASTROPHE... What one report called "catastrophically bad" CPI inflation data sent stocks on their worst ride south since January as investors worried the Fed would crank up the rate hikes and cause a recession.
The Consumer Price Index showed inflation up a full 1.0% in May, and up 8.6% annually, the biggest gain since 1981. Core CPI slowed a bit, but that's of little interest to consumers, as it excludes soaring food and energy prices.
Those consumers drove the University of Michigan Consumer Sentiment index down from 58.4 in May to 50.2, its lowest reading on record since 1978. Some good news? Continuing jobless claims were unchanged.
The week ended with the Dow down 4.6%, to 31,393; the S&P 500 down 5.1%, to 3,901; and the Nasdaq down 5.6%, to 11,340.
Inflation-hating bonds tanked overall, the 30-year UMBS 4.5% fell 1.81, to $99.31. After three weeks of declines, the national average 30-year fixed mortgage rate rose again in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… It's reported that the Fed holds $2.7 trillion in mortgage bonds bought as part of its “quantitative easing” program to keep mortgage rates low. As the Fed now starts “quantitative tightening”—selling those bonds—interest rates could come under more upward pressure.
Ready to sell your property? Time to downsize or upsize? Relocating out of state? Maybe rent a while and see what happens? Give me a call to discuss your goals (702) 767-5557
HOME BUILDING HOLDS, INFLATION AND RETAIL GAINS, THE FED HIKES... May numbers for Housing Starts and Building Permits should show home building activity holding steady. The Producer Price Index (PPI) of wholesale price inflation is forecast to continue higher, which typically precedes a hike in consumer prices. Retail Sales are predicted up, and the Fed is expected to boost rates a half percent or more to get inflation under control.
Forecasting Federal Reserve policy changes in coming months. As inflation continues to rise, the Fed seems determined to rein it in with a series of rate hikes, expected to be at least a half percent at each meeting. Note: In the lower chart a 100.0% probability of change is a 100.0% probability the rate will rise
AFTER FOMC MEETING ON: CONSENSUS
Jun 15 1.25%-1.50%
Jul 27 1.75%-2.00%
Sep 21 2.25%-2.50%
Probability of change from current policy:
AFTER FOMC MEETING ON: CONSENSUS
Jun 15 100.0%
Jul 27 96.6%
Sep 21 66.2%