Updated: Jul 19, 2022
As an independent Mortgage Broker, we are asked everyday what the housing market is doing. Unfortunately, our crystal ball doesn't look forward, it investigates the past for answers. Many agree that the housing market is volatile in many parts of the country. Some areas of the country are booming while others suffer from declining sales. If you recently put an offer in and watched the offer escalate thousands of dollars higher than the original offer you know the pain, I speak of. Many expected that the increase in interest rates would slow home sales and this is causing many analysts to adjust their forecast each month. Both April and May 2022 forecasts have been readjusted upward. While analysts adjust their forecasts, potential home buyers are wondering what is next?
Last month's New Home Sales data from the Census Bureau was a downer for Real Estate Agents. It showed sharp declines in sales and a puzzlingly abrupt jump in inventory levels. For some potential buyers, this was good news as that meant they might have more inventory to choose from. Finally, they might get a chance at an accepted offer. Notably, mortgage application volume is rising despite mortgage rates increasing. Despite rising mortgage rates and home prices, sales of new homes jumped nearly 11% in May from a month earlier.
According to the report, sales of new single-family houses in May were estimated at 696,000, up 10.7% from the revised April rate of 629,000. May’s estimate, however, was still 5.9% below the May 2021 estimate of 740,000. The increase beat economists' expectations. Economists polled by the Reuters news service had predicted new home sales would fall to a rate of 588,000 units.
For our clients, we want you to know that there are opportunities in every part of the country. Keeping a level head can be difficult during an emotional transaction like buying a home. In fact, buying a home is unlike anything else you will ever buy. As trusted advisors to our clients, many begin the process between 3 and 12 months before actively buying a home. You wouldn’t believe how many people wait until the last second only to find out that they don’t have enough time or don’t qualify for the homes they’re searching for. A lot of the time people that I talk to just aren’t sure what to do or where to start. Our goal is to help you simplify and personalize the home buying process from start to finish.
Other highlights from the new home sales data:
NE - DOWN 51.1% this month and 42.5% y/y
MW - DOWN 18.3% this month and 37% y/y
South - UP 12.8% this month and 1.5% y/y
West - UP 39.3% this month and 0.5% y/y
Of the 444k homes available for sale in May, 265k of those were in the South, 105k were in the West, 48k were in the Midwest and only 25k were in the Northeast.
Of the 444k homes available for sale in May, 115k were not started, 292k were under construction, and 37k were completed
If you are already working with a mortgage lender or multiple for that matter, let us give you a second opinion. Most home buyers that I talk to have spoken with multiple lenders. It’s the smart thing to do as no two lenders are the same. You wouldn't buy the first car you see on the lot! Why take the first offer you get for your mortgage? We would be more than happy to give you a second opinion. Get a rate quote or get that application started today! Get the mortgage you deserve.