Westchester County Real Estate Blog

With volatile mortgage rates driving home buyers from the market, economists are skeptical that a dip in borrowing costs this week will have a meaningful impact. The 30-year fixed-rate mortgage fell to an average of 5.3% - still nearly double what it was a year ago - for the week ending July 28, according to Freddie Mac.

Purchase demand continues to tumble as the cumulative impact of higher rates, elecated home prices, increased recession risk and declining consumer confidence take a toll on home buyers. It's clear that over the past two years, the combination of the pandemic, record low mortgage rates and the opportunity to work remotely spurred greater demand. Now, as the market adjusts to a higher rate environment, we are seeing a period of deflated sales activity until the market stabilizes.

The National Association of REALTORS...

Even though national GDP contracted for the second quarter in a row and home sales have fallen for five straight months, property prices are likely to continue growing because of low inventory.

One of the most unusual aspects of the current economy is the labor market. There were more job opening than unemployed people in May - with the difference being nearly two to one, according to Bureau of Labor Statistics data. Construction job openings were at a record high in January, nd these unfilled jobs point to a potential slowdown in the housing market.

Both exisiting-home sales and pending home sales have been falling or stagnant for months. Rising mortgage rates have comined with low inventory to exert downward pressure on the market. Closing activity will continue to sink even more. Some potential home buyers don't want to pay higher monthly...

New home sales in June fell to the lowest level since April 2020. Reflecting declining builder sentiment as construction bottlenecks continue to slow new home building and raise housing costs, the Natiional Association of Home Builders reported on July 26.

Sales of newly built, single-family homes in June fell 8.1% to a 590,000 seasonally adjusted annual rate from a sharply downwardly revised reading in May, according to newly released data by the U.S. Derpartment of Housing and Urban Development and the U.S. Census Bureau. New home sales are down 13.4% in 2022 on a year-to-date basis.

Regionally, on a year-to-date basis, new home sales fell in all four regions, down 12.1% in the Northeast, 24.8% in the Midwest, 12.6% in the South and 9.6% in the West.

Regionally, on a year-to-date basis, new home sales fell in all four regions,...

Pending home sales fell in June as surging mortgage rates and record-high home prices are making home buyers more cautious in moving forward. The median existing-home price hit an all-time high in June ($416,000). Homes were 80% more expensive in June than they were in 2019.

Nearly a quarter of home buyers who purchase d ahome three years ago would be unable to qualify to buy a median-priced home at today's elevated prices.

NAR's Pending Home Sales Index - a forward-looking indicator of home sales - posted an 8.6% decline in June compared to May. Pending home sales are down 20% comapred to a year ago.

Contract signings fell in all four major regions across the country last month. The West saw the largest monthly decline, with pending home sales dropping by one-third in the past year.

Contract signings...

Home sellers today might find themselves encountering a sharp and painful divide between their hopes and reality. The hope, of course, is that their house will quickly fetch multiple offers way over the asking price. The reality? Their property might sit for a while, perhaps with no offers at all.

At that point, sellers might have to contemplate what not long ago was unthinkable: slashing the asking price of their home.

While price reductions might have been a rarity during the red-hot seller's market of the past couple of years, they're becoming increasingly common today. Realtor.com listing data shows that the share of homes that reduced their list price reached 14.9% in June versus 7.6% a year earlier.

Why have price cuts on listings nearly doubled? Because many home sellers have yet to adjust their lofty expectations...

To keep up with the surging cost of living, consumers are spending more and saving less - and rising interste rates aren't helping the matter.

Next week, the Federal Reserve likely will raise rates by another three-quarters of a percentage point, aloth some on Wall Street still think it could opt for a full percentage point increase. 

Fed officials have already raised benchmark short-term borrowing rates 1.5 percentage point this year, including June's 75 bases point increase, which was the largest increase in nearly three decades. A basis point equals 0.01%.

What's more, policymakers have indicated even more increases are coming until runaway inflation begins to show clear sings of a pullback.

With the hot month-over-month and year-over-year numbers coming in as they have, this tells the Federal Reserve it has more work to do with higher interest rates to eventually...

Mortgage rates rose slightly this week ahead of the Federal Reserve's highly anticipated meeting next Tuesday, when it is expeted to increase its benchmark rate by up to a full percentage point. What impact could that have on mortgage rates ahead?

Even though the upcoming rate hike will be more aggressive, it's expected to have a smaller impact on mortgage rates. Data shows that mortgage rates have already priced in some of the effects of the upcoming Fed's rate hikes.

That would be welcome news to home buyers who are etting nervous about rapidly increasing borrowing cosys. Rising mortgage rates are tamping down husing deman, as existing-home sales in June were down 14.2% from a year earlier. The Census Bureau also reports that builders have slowed new-home construction as more buyers get priced out.

The housing market...

Home prices have continued their seemingly inexorable rise, despite America's housing market purportedly being in the throes of a correction, a slowdown - whatever you want to call it. It's defying what many experts predicted and, just maybe, conventional wisdom.

Buyers can't afford these higher prices on top of higher mortgage interest rates. Deals are falling through. Bidding wars are drying up. Six-figure offers over the asking price are going the way of the dinosaurs. So how is it possible that median home list prices were 15.9% higher in the week ending July 9 than they were a year ago, according to Realtor.com data?

The disconnect appears to be that home sellers have yet to adjust to this new reality - the one where they can't s;ap whatever price they'd like on their properties, sit back, and wait for the bidding wars to commence. Surging mortgage rates have made it impossible...