Housing News is a Mixed Bag
The latest housing news is a mixed bag for homebuyers looking to buy a home. According to the Mortage Professionals of America, “US homes are selling at their fastest pace in more than two years.”
Despite low inventory, newly pending sales increased 13.7% month over month as buyers returned to the market. Homes were also selling faster than they have since 2018, with homes typically staying on the market for just 21 days.
However, the national housing inventory is now 18.8% lower than this time last year.
With the number of available homes getting smaller with every passing day, list prices continue to climb as well. The median list price nationwide is now $335,160, up 0.7% from the previous week and 3.2% higher than a year ago.
To make the situation of low inventory more difficult for potential homebuyers. There is an increasing desire to move from the large cities to the suburbs, exurbs and even the country, where the population is sparse.
One Quarter Looking to Move
Redfin reported last week that its database of more than one million house hunters shows that a record 27% are looking to move to a different metro area from where they currently reside.
And it’s not only Redfin that has noticed this trend. Last week, realtor.com released its report showing that more than half of home searchers in the nation’s 100 largest metros are focused on homes in the suburbs of those areas. Indeed, listing views of homes in the suburbs in May dramatically exceeded those from one year ago. But the migration to the suburbs is not a new trend, as it began accelerating before the pandemic, according to realtor.com’s director of economic research Javier Vivas.
Housing News Is a Mixed Bag
Property research firm Black Knight Inc. reports total borrowers more than 30 days late surged to 4.3 million in May, up 723,000 from the previous month. This means at least 8% of all US mortgages were either past due or in foreclosure.
And it is not getting better for those in forbearance. A forbearance agreement allows homeowners to defer mortgage payments for up to six months, but afterward, borrowers must repay. The report said those who qualified for forbearance made payments early in the pandemic. However, now, the percentage is much lower, some 15% of homeowners in forbearance agreements made payments as of June 15, down from 28% in May and 46% in April.
Something we have worried about since we read that renters and homeowners were allowed to skip payments for a short period. What happens after that time?
A repayment when forbearance ends is usually in one lump sum payment. So it’ll be around the fall season when borrowers will have to pay back the owed money.
Repayment could be a severe problem for many, which could lead to a wave of forced selling. The forbearance has only delayed the downturn in the housing market – as the worst has yet to come.
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