Sales slump 4.1% in October amid highest mortgage rates in two decades and a dearth of houses

The median existing house price increased 3.4% from a year earlier to $391,800, the highest for any October.

  • jimmydoreisalefty@lemmy.world
    01·
    8 months ago

    Thanks for the post!

    Interesting to see how the housing market is doing.

    Is it artificial low supply, so high demand? Since many laws were implemented to hault building new working class homes in most dense populated areas, or I am just wrong and don’t know too much?

    • silverbax@lemmy.worldEnglish
      0·
      8 months ago

      I work with a lot of tech directly related to the mortgage industry, and it’s kind of crazy to look at the data. Mortgage originations plummeted as interest rates rose (less people buying houses) but new construction - especially on lots that had been cleared but had been sitting undeveloped for several years - exploded in a rush, and it’s not clear why.

      I’ve been through previous mortgage corrections and this one is pretty tame by comparison to some others - the hard part about buying a house is that prices will rise for years upon years and waiting for a correction seems risky when you see prices rising out of your affordability. But in the past, it has always been true that the market will level out over time.

    • SheeEttin@lemmy.worldEnglish
      0·
      8 months ago

      No, that’s pretty accurate. There is new construction, but not nearly enough, and more importantly not dense enough to satisfy demand.

      People still want to live in cities, but often denser buildings are blocked. And people that want to live in suburban areas can’t afford the homes being built.

      People who want to live in rural areas are fine, because the demand for those homes is so low. Not many people want to live in bumfuck Ohio.

      • jimmydoreisalefty@lemmy.world
        01·
        8 months ago

        Thank you for taking the time to explain!

        Seems cash is becoming king again?

        All-cash sales accounted for 29% of transactions compared with 26% a year ago. Distressed sales, including foreclosures, represented only 2% of transactions, virtually unchanged from the previous year.

    • jrbaconcheese@yall.theatl.socialEnglish
      0·
      8 months ago

      That’s not how supply and demand work. Low supply doesn’t drive demand higher; demand is usually independent of the supply. However low supply for any given demand will cause prices to increase.

      And what makes you think the supply “artificially” low? There’s not a big conglomerate somewhere holding on to a large enough tranche of housing to cause a dip in supply, most likely.

      It’s low supply because homeowners with record-low interest rates are less interested in selling and moving, since the monthly payment they pay right now be for less house. It’s a side-effect (or maybe the main effect? I’m not an economist) of the fed increases.