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In addition to the articles, here are a few items we are reading from across the internet.
Homebuyers are expressing notable pessimism about the trajectory of homebuying, according to the March release of Fannie Mae’s Home Purchase Sentiment Index. Seventy-three percent of respondents indicated that it’s a bad time to buy, setting a record low for the index, which is over a decade old.
After an Oregon law went into effect on January 1 that forces listing agents to reject love letters from buyers, neighbor Washington has considered the same. A similar bill has stalled in the state legislature, but advocates are saying they’ll try again. Advocates for these bills say that buyer love letters – in which buyers write personal notes to sellers that accompany their offers – can contribute to fair housing violations as it opens up transactions to sellers choosing offers, in part, based on biases, whether conscious or unconscious.
The percentage of U.S. homes with a value of over $1 million measured at 8.2 percent in February, according to a recent Redfin analysis. That’s almost double the rate of 4.8 percent in February 2020, before the pandemic. Home values have skyrocketed in recent years. Time will tell how much is due to inflation and low interest rates and how much of the appreciation is due to true increases in value.
2022 is starting out on the same low-inventory track it has been on over the last several years with the number of existing-home sales dropping in February from the month before and from a year ago. With increasing interest rates and price increases, homebuyer challenges rise.
A Zillow study found that in 25 of 38 major metros, home value growth outpaced median salaries. In 11 of the metros analyzed, the average home value rose by over $100,000. San Jose led the way with an average home in the city gaining a value of $229,277 in 2021. Overall, the Zillow study shows that the average U.S. home saw an appreciation of $52,667. Real estate been a sustaining economic boon for many Americans over the difficult couple of last years. Homeowners and sellers have seen big gains. With interest rates rising, increases of this size are unlikely in the foreseeable future.
Rates on 30-year fixed-rate mortgages hit 5.05 percent in early April, crossing the 5 percent threshold months, or even years, ahead of some experts’ expectations of rate jumps this year. The U.S. Federal Reserve has been raising rates in an effort curb inflation. Agents in some markets are reporting buyers shifting to a more conservative tack when offering on houses – practicing more price discipline and not going over asking price as often. This could be the first move to the market becoming more balanced.
In an effort to tame a runaway housing market, Canada is banning foreigners (students, foreign workers or foreigners who are permanent residents) from buying homes in the country for two years. Canadian home prices have risen by over 50 percent in the last two years, which is spurting the move. The Canadian government is also looking to address the high demand by streamlining new-home permitting and to allow under-40 potential homebuyers to save for down payments tax-free in a new financial vehicle. The Canadian Real Estate Association, for its part, is looking to change the practice of buyers who make offers not seeing the offers of other buyers by publishing offers on listings in real time on its listing website realtor.ca. These are interesting moves for a government to take to address housing shortage and affordability issues running rampant.
With interest rates low, and some urbanites feeling the squeeze in their expensive rentals, some chose to purchase second homes in nearby rural, much more affordable locations to use as getaways – even while remaining renters of their primary home. No doubt, real estate agents have countless stories from the wild market of the last two years that tell just how overheated homebuyer demand had gotten. This trend chronicled by the New York Times reveals one of the many that have played out in the last few years, pushing home prices to all-time highs and inventory to record lows.
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