Rising home prices, higher interest rates, and increased building material costs have
pressured housing affordability to a ten-year low, according to the National
Association of Home Builders. Keen market observers have been watching this
situation take shape for quite some time. Nationally, median household income has
risen 2.6% in the last 12 months, while home prices are up 6.0%. That kind of gap
will eventually create fewer sales due to affordability concerns, which is happening
in several markets, especially in the middle to high-middle price ranges.
New Listings were up 19.9 percent to 1,634. Pending Sales increased 26.3 percent
to 1,360. Inventory grew 9.9 percent to 3,755 units.
Prices were still soft as Median Sales Price was down 2.3 percent to $166,050. Days
on Market decreased 14.5 percent to 53 days. Months Supply of Inventory was up
3.1 percent to 3.3 months, indicating that supply increased relative to demand.
While some are starting to look for recessionary signs like fewer sales, dropping
prices and even foreclosures, others are taking a more cautious and research-based
approached to their predictions. The fact remains that the trends do not yet support
a dramatic shift away from what has been experienced over the last several years.
Housing starts are performing admirably if not excitingly, prices are still inching
upward, supply remains low and consumers are optimistic. The U.S. economy is
under scrutiny but certainly not deteriorating.
Information courtesy of CMLS*