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Housing Market Big Shift
October 11, 2021 at 2:40pm | Mac Rogers
the housing market big shift here? The past year has been a crazy one for real estate. Severe lack of inventory and record breaking price appreciation has been the theme of this market.
Here are the latest percentages showing the year-over-year increase in home price appreciation:
The House Price Index (HPI) from the Federal Housing Finance Agency (FHFA): up 18.8%
The S&P National Home Price Index from Case-Shiller: up 18.6%
The Home Price Insights Report from CoreLogic: up 18%
Everybody now wants to know what is in store for the foreseeable future. Are we starting to see the market shift? When will the housing market crash? Pretty much everyone is worried or scared that we might be in a housing bubble that we will eventually
crash. Add to that the fact that we have a lot of outside forces bearing down on us. Things like the delta variant, the economy, political uncertainty all these things are weighing heavy on would be home buyers.
Here's what I'm starting to see in my local market and also how my clients are reacting to these events.
One, there is an increase of inventory. The increase in inventory is not significant. As a matter of fact it still does not meet demand yet. Right now the clients that I am helping buy a house have a little more of a "wait and see" attitude because they
are seeing properties coming on the market.
On the flip side, the people that I am helping sell their property, the offers that are coming in are not that aggressive anymore. No more releasing of contingencies upfront. Still getting good prices or offers but not the usual frenzy.
And this is not only here in my local market. According to a recent realtor.com article, inventory rose 5.1% in the 50 biggest US metros that they track.
Columbus OH had the biggest increase in inventory followed by Louisville, KY and then Cleveland OH. This is according to the newly released monthly housing report.
Now another thing that might be signaling a shift is mortgage applications. According to the Mortgage Bankers Association, Mortgage application volume has fallen to its lowest level since mid-July for the week ending September 03.
According to the report mortgage applications to purchase a home were basically flat last week, falling 0.2% from one week earlier. Purchase application volume was 18% lower than the same week one year ago.
Again this is one of those logical assumptions that I make. If inventory is going up and there are a lot of buyers, mortgage purchase applications should also be increasing and not going down.
Right now my gut feeling is that 60%, I feel like the shift has started because of inventory and the list to price ratio. If you're a buyer, any added inventory is a win. The same thing with price. Homes not going over list no matter how small, again
that's a win.
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Mac Rogers is not a tax accountant or an attorney or financial adviser. Therefore, the information in these videos shall not be relied upon as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified
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