Housing Market Highlights- August 2, 2022

The market continues to change and inflation and recession continue to be the hot topics of the summer. The Feds’ raised the interest rate again last week but surprisingly, the average 30-year fixed rate mortgage, dipped to the lowest level since mid-April, according to Mortgage News Daily. So right now, we see slightly lower rates and increasing inventory....a positive formula for potential buyers.

Here are some highlights in the housing market this month according to the California Association of Realtors::

New home sales fell 8.1% to 590,000 in June from the prior month and dropped 17.4% from the same month of last year. Affordability may have played a role in recent months, and some would-be homebuyers simply could not afford the higher monthly payments as interest rates surged.

The slowdown in demand pushed new home construction inventory up to 9.3 months, the highest level since May 2010.

The median price of a new home sold in June was down 9.5% from May but remained up 7.4% from last June.

Residential investment declined 14.0%, as builders scaled back due to concerns about homebuyers’ affordability challenges.

The Federal Reserve hiked the federal funds rate up another 75 basis points to a range between 2.25% and 2.5% in the July Federal Open Market Committee (FOMC) meeting.

Consumer confidence is now at a 17-month low: With costs of living outpacing wage growth, consumer optimism continues to falter.

C.A.R. Market Matters, August 1, 2022