Home Prices Fall as Inventory Rises
(NEWSnet) — Home prices are finally on the decline, according to a new report from Realtor.com.
Last month’s median home price reportedly was $417,000. That’s down a staggering $32,000 from a peak in June.
Lower prices also mean inventory is up. According to the report, there are almost 47% more listings now over this time last year. However, many of those listings are not new. New listings are actually down by 17% from last year.
Mortgage rates also declined.
The average contract interest rate for a thirty-year fixed mortgage fell by about two-tenths of one percent, according to the Mortgage Bankers Association. That’s the third straight week of declines but comes amid a massive 7% surge last month.
Applications were up last week by about 4% but they’re still much lower than this time last year — down by 41%.
Mortgage applications to purchase a home gained 4% from the previous week but demand was 41% lower than the same week one year ago.
Part of the downturn is a result of consumer fears of a housing market crash in the next year.
Amid inflation woes and rising interest rates, Americans have paused making big moves and upsizing.
According to a report from LendingTree, a shocking 41% of Americans believe that the housing market will collapse in the next year.
Fortunately, the Federal Reserve plans to tone down those aggressive interest rate hikes as soon as this month.
Fed Chair Jay Powell announced the news on Wednesday.
While the federal reserve doesn’t directly decide interest rates for consumer purchases like mortgages, banks generally peg their interest rates to that of the central bank.