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End of June Market Recap

The real estate market is full of ups and downs, and there have been a lot of drops over the last year. This last week proved to be no different, with the median price of homes falling to an all-time low since 2008. Zillow mortgage rates have risen recently, but fallen a point this past week. According to the First American Real House Price Index, affordability is actually rising though most odds are stacked against it.

The median home price in the U.S. in the second quarter of this year hit its least affordable level since the third quarter of 2008. So many factors are stacked against buyers in today’s economy, making it harder and harder for them to afford homes, especially if they are millenials. The markets now are overall less affordable than they have been since 2009. A part of this can be attributed to the fact that wage growth has declined steadily in the last few years.

In addition to these market challenges, the 30 year fixed mortgage rate has also dropped. This is thought to be a result of the bond market being sold off and Treasury yields increasing. If the market rebounds the rate should increase again. The Zillow mortgage ticker in turn was hurt by this drop as well but is expected to make a comeback. While these are not large percentages, they still have a considerable effect on the real estate market.

The First American Real House Price Index just released a report claiming that affordability is on the rise. Real house prices decreased 1.6 percent between March and April of this year. Real house prices are just over 30 percent under what they were costing in 2006. According to this research, the dip in fixed mortgage rates caused enough offset in consumer buying power to increase affordability statistically. The theory behind this claim is that if it weren’t for low inventory, the market wouldn’t be as tight and would help affordability even more.

Don’t forget to call your BridgeView agent today to discuss the housing market and your status of affordability!

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