Building Materials Prices Skyrocket!

Building Materials Prices Skyrocket!

Building Materials Prices Move Higher, Up 19% Year-over-Year | Eye On Housing According to the latest Producer Price Index (PPI) report released today by the Bureau of Labor Statistics, the prices of goods used in residential construction ex-energy (not seasonally adjusted) climbed 0.5% in April, following upwardly revised increases of 1.9% and 2.4% in March and February, respectively. Year-over-year, building materials prices are up 19.2% and have risen 35.6% since the start of the pandemic. As a result, the price index of services used in home building (including trade services, transportation and warehousing) has climbed 13.3% since the start of the year. Year-over-year, the index has increased 18.1% and is up 45.6% since the start of the pandemic.

Mortgage Purchase Volume Has Another Strong Week

Purchase Volume Has Another Strong Week Mortgage application volume continued its recovery last week driven by a second strong increase in purchasing activity. The seasonally adjusted Purchase Index increased 5 percent on both a seasonally adjusted and an unadjusted basis. "Despite a slow start to this year’s spring home buying season, prospective buyers are showing some resiliency to higher rates. The average contract interest rate for conforming 30-year fixed-rate mortgages increased to 5.53 percent from 5.36 percent, with points increasing to 0.73 from 0.63. The rate for 5/1 ARMS averaged 4.47 percent with 0.73 point compared to 4.25 percent with 0.75 point the prior week.

Home Buyer Sentiment Drops To All Time Low!

Home Buyer Sentiment Drops To All Time Low!!!

Record Low in U.S. Say It Is a Good Time to Buy a House Thirty percent of U.S. adults say it is a good time to buy a house, down 23 percentage points from a year ago and the first time the figure has been below 50%. Until now, at least half of Americans had consistently said it was a good time to buy a house. All major subgroups of Americans are significantly less positive about the housing market now than they were a year ago, with the percentage saying it is a good time to buy a house dropping at least 17 points in each of these groups. Twenty-five percent of young adults, those aged 18 to 34, say it is a good time to buy a house, down from 42% a year ago. Among middle-aged adults, those 35 to 54, 28% believe the housing market is favorable compared with 52% last year. Older adults are somewhat more likely to say it is a good time to buy a house, with 35% holding this view -- though that is down from 61% in 2021

Fed Raises Interest Rates by 0.50%

Largest move since 2000

Fed raises interest rates by 0.50%, largest move since 2000

Fed raises interest rates by 0.50%, largest move since 2000 Fed raises rates by 50 basis points, will begin shrinking balance sheet June 1. The Federal Reserve on Wednesday raised short-term interest rates by 0.50%, as part of an effort to tamp down the inflationary pressures weighing on Americans. The central bank suggested that it will further raise borrowing costs throughout this year as it attempts to undo its pandemic-era, easy money policies. The Fed is now targeting interest rates in a range between 0.75% and 1.00%, with some Fed officials advocating for raising the target closer to 2.5% by the end of the year. Balance sheet update. The Fed also officially unveiled a strategy to shrink its asset holdings, after buying trillions of dollars in U.S. Treasuries and agency mortgage-backed securities to contain COVID’s impact on financial markets.

40% More Income Needed To Afford Home In The Sunbelt

40% More Income Needed To Afford Home In The Sunbelt

Pandemic Homebuyers Flocked to the Sun Belt for Better Prices. Now, You’ll Need 40% More Income to Afford a Home There. Homes are much less affordable than they were a year ago due to skyrocketing prices and surging mortgage rates–especially in Sun Belt metros like Tampa, Phoenix and Las Vegas. Homebuyers in Tampa, FL need to earn $67,353 annually to afford the metro area’s typical monthly mortgage payment of $1,684. That’s up a staggering $21,791 (47.8%) from $45,562 a year earlier, the biggest percent increase of any major U.S. metro. Next came the following metros, which all saw gains of nearly 40% or more: Orlando, FL, Jacksonville, FL, Nashville, TN, Austin, TX, Fort Worth, TX Anaheim, CA.

Home Prices Have Begun Falling

Top 10 Cities With Declining Prices

Home Prices Have Begun Falling

Home Prices Have Begun Falling: Here Are the Cities Where They're Down the Most 1. Toledo, OH. 2. Rochester, NY. Like with many of the cities on this list, it appears that local investors have been trying to take advantage of these record-high price increases, selling off former rentals  3. Detroit. 4. Pittsburgh, PA. 5. Springfield, MA. 6. Tulsa, OK. 7. Los Angeles. 8. Memphis, TN. 9. Chicago. That provides opportunities for buyers on a budget to get into the housing market at a lower price point. 10. Richmond, VA.

30 Year Mortgage Rates Now Over 5.5%

30 Year Fixed Mortgage Rates Now Over 5.5%

30yr Fixed Mortgage Rates Now Over 5.5% The hits keep coming for mortgage rates in 2022. Not since the early 80s have rates risen as quickly as they have in the past 2 months (or the past 4 months for that matter). Less than 6 months ago, some lenders were still quoting top tier conforming 30yr fixed rates just under 3%.   As recently as early March, those same rates were still in the high 3's at times. Now today, the average lender is easily over 5.5%. 

Shrinking Middle Class Continues

Shrinking Middle Class Continues

How the American middle class has changed in the past five decades The middle class, once the economic stratum of a clear majority of American adults, has steadily contracted in the past five decades. The share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021, according to a new Pew Research Center analysis of government data. Lower-income" adults have household incomes less than $52,000 and "upper-income" adults have household incomes greater than $156,000. Meanwhile, the share of aggregate income accounted for by upper-income households has increased steadily, from 29% in 1970 to 50% in 2020. Progress up the income ladder for a demographic group does not necessarily signal its economic status in comparison with other groups at a given point in time. Married adults and those in multi-earner households made more progress up the income ladder from 1971 to 2021 than their immediate counterparts.

Out-of-town Homebuyers In Orlando Can Outspend Locals

Out-of-town homebuyers in Orlando can outspend locals

Out-of-town homebuyers in Orlando can outspend locals by $84K House hunters headed to Orlando from California or New York have an extra $84,000 to spend when compared to local buyers. The average maximum house budget for migrants coming to metro Orlando is $555,216.  Meanwhile, local buyers have an average maximum budget of $471,145. That means out-of-town buyers in Orlando on average boast a maximum home buying budget 17.8% higher than local buyers. It seems since 2020, the number of out-of-state clients is getting bigger." Local Realtors say these buyers often are coming from the Northeast, West Coast and South Florida, where home prices and wages are typically much higher. This gives them distinct advantages in the bidding wars raging in the supply-constrained housing market.

Mortgage Delinquencies Rose For First Time In 9 Months

Mortgage Delinquencies Rose For First Time In 9 Months

Mortgage delinquencies rose for the first time in 9 months. Here’s what that means for the housing market. More homeowners are late on their mortgage payments. Indeed, in February, the national delinquency rate rose for the first time in 9 months, largely driven by a 97,000 rise in early-stage delinquencies But even though the total number of past-due loans rose 1.8% in February 2022 from a month earlier, it’s essential to note that the delinquency rate remains near pre-pandemic levels This is largely due to borrowers leaving forbearance plans and returning to making payments. If a payment is missed for 3 straight months or longer, one can expect a good number of these properties to show up as for-sale inventory. Foreclosures can potentially cool down a hot market. This can give home buyers more options, though foreclosures can also indicate that the local economy is struggling.