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According to the U.S. Census Bureau, this year, builders are on pace to complete more than a million new homes in this country. If you’ve had trouble finding a home to buy over the past year, it may be time to work with your trusted agent to consider a new build and the incentives that come with it. Here’s why.

The Supply of Newly Built Homes Is Rising

When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the inventory of existing homes is on the rise today, it’s still in tight supply, meaning it can be challenging to find just the right one.

The inventory of newly built homes, however, is also rising. And with more options available than there have been in years, a new home may be just the answer you’re looking for. The graph below shows just how much the supply of newly built homes has grown this year.

New Homes May Have the Incentives You’re Looking for Today | MyKCM

And here’s the thing – builders are also keeping a close eye on current market trends. With mortgage rates rising this year and, as a result, buyer demand softening, builders are slowing their pace of new construction. That’s because they learned their lesson in the housing crash of 2008 and want to avoid over-building and having too much inventory in their pipeline.

Basically, while there are more newly built homes on the market today than there have been in years, many builders want to sell their current inventory before adding much more – and that’s where you can really benefit. Today, builders may be more willing to work with buyers. According to a recent survey83% of builders have reduced their prices over the last three months.

What That Means for You

The current supply of newly built homes for sale coupled with the fact that data shows the majority of builders are doing price reductions are both great news for you. It means you may have more options and possibly some much-needed relief if you consider newly built homes in your search.

Bottom Line

If you’re ready to buy, it may be time to look for a newly built home. Learn what’s available in our area and what incentives these builders are offering.

Whether or not you owned a home in 2008, you likely remember the housing crash that took place back then. And news about an economic slowdown happening today may bring all those concerns back to the surface. While those feelings are understandable, data can help reassure you the situation today is nothing like it was in 2008.

One of the key reasons why the market won’t crash this time is the current undersupply of inventory. Housing supply comes from three key places:

For the market to crash, you’d have to make a case for an oversupply of inventory headed to the market, and the numbers just don’t support that. So, here’s a deeper look at where inventory is coming from today to help prove why the housing market isn’t headed for a crash.

Current Homeowners Putting Their Homes Up for Sale

Even though housing supply is increasing this year, there’s still a limited number of existing homes available. The graph below helps illustrate this point. Based on the latest weekly data, inventory is up 27.8% compared to the same week last year (shown in blue). But compared to the same week in 2019 (shown in the larger red bar), it’s still down by 42.6%.

Why Today’s Housing Inventory Proves the Market Isn’t Headed for a Crash | MyKCM

So, what does this mean? Inventory is still historically low. There simply aren’t enough homes on the market to cause prices to crash. There would need to be a flood of people getting ready to sell their houses in order to tip the scales toward a buyers’ market. And that level of activity simply isn’t there.

Newly Built Homes Coming onto the Market

There’s also a lot of talk about what’s happening with newly built homes today, and that may make you wonder if we’re overbuilding. But home builders are actually slowing down their production right now. Ali Wolf, Chief Economist at Zonda, notes:

“It has become a very competitive market for builders where they are trying to offload any standing inventory.”

To avoid repeating the overbuilding that happened leading up to the housing crisis, builders are reacting to higher mortgage rates and softening buyer demand by slowing down their work. It’s a sign they’re being intentional about not overbuilding homes like they did during the bubble.

And according to the latest data from the U.S. Census, at today’s current pace, we’re headed to build a seasonally adjusted annual rate of about 1.4 million homes this year. While this will add more inventory to the market, it’s not on pace to create an oversupply because builders today are more cautious than the last time when they built more homes than the market could absorb.

Distressed Properties (Short Sales or Foreclosures)

The last place inventory can come from is distressed properties, including short sales and foreclosures. Back in the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to secure a home loan they couldn’t truly afford. Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses data from ATTOM Data Solutions on properties with foreclosure filings to help paint the picture of how things have changed since the crash:

Why Today’s Housing Inventory Proves the Market Isn’t Headed for a Crash | MyKCM

This graph shows how in the time around the housing crash there were over one million foreclosure filings per year. As lending standards tightened since then, the activity started to decline. And in 2020 and 2021, the forbearance program was a further aid to help prevent a repeat of the wave of foreclosures we saw back around 2008.

That program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And data on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.

Bottom Line

Although housing supply is growing this year, the market certainly isn’t anywhere near the inventory levels that would cause prices to drop significantly. That’s why inventory tells us the housing market won’t crash.

If you put off your home search at any point over the past two years, you may want to consider picking it back up based on today’s housing market conditions. Recent data shows the supply of homes for sale is increasing, giving buyers like you additional options.

But it’s important to keep in mind that while inventory is improving, it’s still a sellers’ market. And that means you need to be prepared as you set out on your home search. Here are three tips for buying the home of your dreams today.

1. Understand How Mortgage Rates Impact Your Homebuying Power

Mortgage rates have increased significantly this year, and over the past few weeks, they’ve been fluctuating quite a bit. It’s important to stay up to date on what’s happening with rates and understand how they can impact your purchasing power when you’re thinking of buying a home. The chart below can help.

Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within or below that range, while the red is a payment that exceeds it.

3 Tips for Buying a Home Today | MyKCM

As the chart shows, even a small change in mortgage rates can have a big impact on your monthly payments. If rates rise, you could exceed your budget unless you pursue a lower home loan amount. If rates fall, your purchasing power may increase, which could give you additional options for your search.

2. Be Open to Exploring Different Options During Your Search

The supply of homes for sale is improving, which gives you more homes to choose from. But historically, supply is still low. That means as you search for homes, if you still don’t find something that meets your needs, it may be worth expanding your search.

recent article from the Washington Post highlights a few things buyers can consider today. It encourages opening yourself up to more areas. For example, if there’s a location you’ve previously ruled out (like a particular town, for example) it may be worth taking another look.

And if you’re able to, opening your search up to include other housing types, like newly built homes, condominiums, or townhomes can further increase your pool of options. Even as the inventory of homes for sale improves today, finding ways to cast a wider net during your search could help you find a hidden gem.

3. Work with a Local Real Estate Professional for Expert Guidance

Ultimately, you need to be prepared when you set out to buy a home. Jeff Ostrowski, Senior Mortgage Reporter for Bankrate, explains:

“Taking the leap to homeownership can provide a feeling of pride while boosting your long-term financial outlook, if you go in well-prepared and with your eyes open.”

No matter where you’re at in your homeownership journey, the best way to make sure you’re set up for success is to work with a real estate professional. If you’re just starting your search, a real estate professional can help you understand your local market and search for available homes. And when it’s time to make an offer, they’ll be an expert advisor and negotiator to help yours stand out above the rest.

Bottom Line

Strategically planning your home search by understanding today’s mortgage rates, casting a wide net, and building a team of experts can be the keys to finding the home of your dreams. Make sure you have expert advice each step of the way.

If you’re wondering if home prices are going to come down due to the cooldown in the housing market or a potential recession, here’s what you need to know. Not only are experts forecasting home prices will continue to appreciate nationwide this year, but most of them also actually increased their projections for home price appreciation from their original 2022 forecasts (shown in green in the chart below):

Experts Increase 2022 Home Price Projections | MyKCM

As the chart shows, most sources adjusted up, and now call for more appreciation in 2022 than they originally projected this January. But why are experts so confident the housing market will see ongoing appreciation? It’s because of supply and demand in most markets. As Bankrate says:

“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”

Knowing that experts forecast home prices will continue to appreciate in most markets and that they’ve actually increased their original projections for this year should help you answer the question: will home prices fall? According to the latest forecasts, experts are confident prices will continue to appreciate this year, although at a more moderate rate than they did in 2021.

Bottom Line

If you’re worried home prices are going to decline, rest assured many experts raised their forecasts to say they’ll continue to appreciate in most markets this year.

With all the headlines and buzz in the media, some consumers believe the market is in a housing bubble. As the housing market shifts, you may be wondering what’ll happen next. It’s only natural for concerns to creep in that it could be a repeat of what took place in 2008. The good news is, there’s concrete data to show why this is nothing like the last time.

There’s a Shortage of Homes on the Market Today, Not a Surplus

The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.

For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to tumble. Today, supply is growing, but there’s still a shortage of inventory available.

The graph below uses data from the National Association of Realtors (NAR) to show how this time compares to the crash. Today, unsold inventory sits at just a 3.0-months’ supply at the current sales pace.

3 Graphs To Show This Isn’t a Housing Bubble | MyKCM

One of the reasons inventory is still low is because of sustained underbuilding. When you couple that with ongoing buyer demand as millennials age into their peak homebuying years, it continues to put upward pressure on home prices. That limited supply compared to buyer demand is why experts forecast home prices won’t fall this time.

Mortgage Standards Were Much More Relaxed During the Crash

During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. The graph below showcases data on the Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA). The higher the number, the easier it is to get a mortgage.

3 Graphs To Show This Isn’t a Housing Bubble | MyKCM

Running up to 2006, banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance their current home. Back then, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.

Today, things are different, and purchasers face much higher standards from mortgage companies. Mark Fleming, Chief Economist at First Americansays:

Credit standards tightened in recent months due to increasing economic uncertainty and monetary policy tightening.” 

Stricter standards, like there are today, help prevent a risk of a rash of foreclosures like there was last time.

The Foreclosure Volume Is Nothing Like It Was During the Crash

The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. Foreclosure activity has been on the way down since the crash because buyers today are more qualified and less likely to default on their loans. The graph below uses data from ATTOM Data Solutions to help tell the story:

3 Graphs To Show This Isn’t a Housing Bubble | MyKCM

In addition, homeowners today are equity rich, not tapped out. In the run-up to the housing bubble, some homeowners were using their homes as personal ATMs. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a wave of distressed property listings (foreclosures and short sales), which sold at considerable discounts that lowered the value of other homes in the area.

Today, prices have risen nicely over the last few years, and that’s given homeowners an equity boost. According to Black Knight:

In total, mortgage holders gained $2.8 trillion in tappable equity over the past 12 months – a 34% increase that equates to more than $207,000 in equity available per borrower. . . .”

With the average home equity now standing at $207,000, homeowners are in a completely different position this time.

Bottom Line

If you’re worried we’re making the same mistakes that led to the housing crash, the graphs above should help alleviate your concerns. Concrete data and expert insights clearly show why this is nothing like the last time.

Whether you’re a potential homebuyerseller, or both, you probably want to know: will home prices fall this year? Let’s break down what’s happening with home prices, where experts say they’re headed, and why this matters for your homeownership goals.

Last Year’s Rapid Home Price Growth Wasn’t the Norm

In 2021, home prices appreciated quickly. One reason why is that record-low mortgage rates motivated more buyers to enter the market. As a result, there were more people looking to make a purchase than there were homes available for sale. That led to competitive bidding wars which drove prices up. CoreLogic helps explain how unusual last year’s appreciation was:

Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”

In other words, the pace of appreciation in 2021 far surpassed the 6% the market saw in 2020. And even that appreciation was greater than the pre-pandemic norm which was typically around 3.8%. This goes to show, 2021 was an anomaly in the housing market spurred by more buyers than homes for sale.

Home Price Appreciation Moderates Today

This year, home price appreciation is slowing (or decelerating) from the feverish pace the market saw over the past two years. According to the latest forecasts, experts say on average, nationwide, prices will still appreciate by roughly 10% in 2022 (see graph below):

What Does the Rest of the Year Hold for Home Prices? | MyKCM

Why do all of these experts agree prices will continue to rise? It’s simple. Even though housing supply is growing today, it’s still low overall thanks to several factors, including a long period of underbuilding homes. And experts say that’s going to help keep upward pressure on home prices this year. Additionally, since mortgage rates are higher this year than they were last year, buyer demand has slowed.

As the market undergoes this change, it’s true price appreciation this year won’t match the feverish pace in 2021. But the rapid appreciation the market saw last year wasn’t sustainable anyway.

What Does That Mean for You?

Today, the market is beginning to move back toward pre-pandemic levels. But even the forecast for 10% home price growth in 2022 is well beyond the 3.8% that’s more typical for a normal market.

So, despite what you may have heard, experts say home prices won’t fall in most markets. They’ll just appreciate more moderately.

If you’re worried the house you’re trying to sell or the home you want to buy will decrease in value, you should know experts aren’t calling for depreciation in most markets, just deceleration. That means your home should still grow in value, just not as fast as it did last year.

Bottom Line

If you’re thinking of making a move, you shouldn’t wait for prices to fall. Experts say nationally, prices will continue to appreciate this year, just at a more moderate pace.

If you tried to buy a home during the pandemic, you know the limited supply of homes for sale was a considerable challenge. It created intense bidding wars which drove home prices up as buyers competed with one another to be the winning offer.

But what was once your greatest challenge may now be your greatest opportunity. Today, data shows buyer demand is moderating in the wake of higher mortgage rates. Here are a few reasons why this shift in the housing market is good news for your homebuying plans.

The Challenge

There were many reasons for the limited number of homes on the market during the pandemic, including a history of underbuilding new homes since the market crash in 2008. As the graph below shows, housing supply is well below what the market has seen for most of the past 10 years (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | MyKCM

The Opportunity

But that graph also shows a trend back up in the right direction this year. That’s because moderating demand is slowing the pace of home sales and that’s one of the reasons housing supply is finally able to grow. For you, that means you’ll have more options to choose from, so it shouldn’t be as difficult to find your next home as it has been recently.

And having more options may also lead to less intense bidding wars. Data from the Realtors Confidence Index from the National Association of Realtors (NAR) shows this trend has already begun. In their recent reports, bidding wars are easing month-over-month (see graph below):

Is the Shifting Market a Challenge or an Opportunity for Homebuyers? | MyKCM

If you’ve been outbid before or you’ve struggled to find a home that meets your needs, breathe a welcome sigh of relief. The big takeaway here is you have more options and less competition today.

Just remember, while easing, data shows multiple-offer scenarios are still happening – they’re just not as intense as they were over the past year. You should still lean on an agent to guide you through the process and help you make your strongest offer up front.

Bottom Line

If you’re still looking to make a move, it may be time to pick your home search back up today.

As we take a look at the interest rates since January, we can see that is what is really defining the current real estate market right now and the volatility is a result of the moves the Federal Reserve is making to ease inflation – the enemy of long-term interest rates.

this year is really defined by the rising mortgage rates, and what you’re looking at here is the Freddie Mac 30-year fixed rate from January all the way through to the latest data we have today, and what we can see over time is that mortgage rates really ticked up week after week after week. And you know they started to potentially peak right around the mid-June end-of-June time, and now we’re seeing a lot of volatility. So when I say that they’ve peaked, definitely not out of the woods yet, Signs yes, but mortgage rates are showing a lot of volatility right now. Where we are today, a little bit lower than where we were about a month ago, but we’re still watching them.   http://www.freddiemac.com/pmms/ https://freddiemac.gcs-web.com/node/25666/pdf

The National Bureau of Economic Research defines what a recession is and when it is. A recession is a significant decline in economic activity, spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale retail sales. Technically, a recession is 2 consecutive quarters of negative growth.

going all the way back to the 1940s, the late forties, every time we’ve seen two consecutive quarters of negative growth, a recession has been called.   https://twitter.com/charliebilello/status/1552699775618895873

Looking all the way back to the 1940s, every time we’ve seen two consecutive quarters of negative growth, a recession has been called.

The percentage of economists who said yes a year ago was only about 12%, but look at how that has ticked up over time, and in a year’s time, half of economists say that we’re headed for a recession in the next 12 months.   https://www.wsj.com/articles/economic-forecasting-survey-archive-11617814998 (subscription required)

According to a survey from the Wall Street Journal that asked economists if they believe a recession will happen in the next 12 months, we can see more and more of the experts are predicting a recession. A recession is an economic slowdown where, historically, we have seen homes appreciate in value and mortgage rates fall.

In 4 of the last 6 recessions, home prices actually appreciated in value. Now we all remember 2008 when home values lost nearly 20% value, but that’s really a very fundamentally different place than where we are today. The market was drastically different.  https://www.corelogic.com/blog/2019/03/housing-recessions-and-recoveries.aspx https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011 https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/

In 4 of the last 6 recessions, home prices actually appreciated in value, except for 2008, which we have covered in previous monthly market updates was a fundamentally different place than where we are today.

this is a combination of data from Freddie Mac and mortgage specialists, it shows how from the peak of the recession to the trough, each of those yellow boxes that you can see across this graph, how mortgage rates have fallen in recessionary times.   http://www.freddiemac.com/pmms/ https://mtg-specialists.com/2022/05/11/recession-interest-rates-and-real-estate/

In all 6 of the last 6 recessions, interest rates have declined.

Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over. Fortune

One of the biggest reasons a housing crash is not predicted is inventory. In 2008, we had an oversupply of homes on the market – which causes home prices to fall. Today, we have an under supply – which causes home prices to rise.

This is a look at existing inventory and today the total housing inventory registered at the end of June, the latest data that we have, was 1.26 million units. Now if we look at that from a month’s supply, that’s what you’re seeing right here, unsold inventory today is at a three month supply. That’s that little green bar that you can see over on the right. Now compare that to the red bars, that’s the oversupply that we had during the housing bubble when the market crashed. That’s because we had more homes on the market than we had buyers to buy them. We have the exact opposite today, and if you look at this comparatively, where we are today is nowhere near the oversupply we had last time. Now you would have to build a case that a flood of homeowners are getting ready to sell their houses. They’re going to jump into the market, they’re going to make a move and all of this inventory is coming to the market that would actually tip the scales into that oversupply zone. We’re just not even close to being there. The typical neutral market is six to seven months of supply of inventory. We don’t even have half that at this point. So although we know this number is growing and we are keeping an eye on that because more inventory is coming to the market. That’s the tick up we’re seeing this year. We certainly aren’t anywhere near where we could potentially see the market crash, because of so many homes coming onto the market.   https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales

We are seeing about a 3-month supply of homes (inventory).  We are far, far away from the 10-month supply of homes we saw leading up to and in 2008. The typical neutral market is 6 to 7 months of supply of inventory.

Now the other place where inventory comes from is new construction. This is a look at monthly new residential construction, and we’ve broken it down into the four stages of construction. Building permits and housing starts, those are our leading indicators that tell us where the market is headed. And then on the bottom under construction and housing units completed, those are the lagging indicators, what’s happened so far. And what we can see in terms of the leading indicators, the two at the top, permits and starts, those are slowing down from May to June. You can see that happening and that’s because builders are saying, hold on, we’re seeing mortgage rates rise. We’re seeing that softening buyer demand. We’re not going to overbuild. We’re not going to get started on more homes than we know we can complete. They’re really being cautious right now, and so while we’ve had 14 years of under supply of newly constructed homes built in this country, they’re not going to overbuild at that time. That’s the little tick down that you can see, so slowing there. And if you look at the bottom, especially down at housing units completed, you can see that we’re headed to build a seasonally adjusted annual rate of about 1.3 million homes this year. Now that’s wonderful. That will add more inventory to the market. It will help really create some options for home majun buyers. But we’re not on pace to have an oversupply. You can see that May to June ticked down on units completed. So we are definitely seeing more new construction. We are on pace to build 1.3 million homes in this country. We haven’t seen that in over 14 years. That’s huge. That’s a wonderful addition to the inventory, but not anything that would take us to an oversupply like we had when the housing market crashed.   https://www.census.gov/construction/nrc/pdf/newresconst.pdf

Inventory can also come from new construction. Building permits and housing starts are the leading indicators (what is to come), while under construction and housing units completed are the lagging indicators (what has happened). The leading indicators are slowing down from May to June as builders are seeing mortgage rates rise. This shows further confirmation that we’re not on pace to have an oversupply.

Now the third place where inventory comes from, we’ve talked about this quite a bit over the past couple of years, is foreclosures or short sales or distressed properties. The reason we’re not going to be seeing a flood of foreclosures, a big part of that is because lending standards are under control. Now back when the housing bubble burst, we had much looser lending standards. They’ve tightened up significantly and that’s what this graph shows. This is the mortgage credit availability index, and it shows the higher that green line is, the easier it was to get a loan. what you can see in 2006, 2007, it really peaked where we used to joke that it was harder to not get a loan than to get a loan. It was much easier for someone to secure a home loan and that created inflated demand and many millions of people were foreclosed on their homes because they weren’t coming to the table as a qualified buyer and they weren’t able to repay their loan over time. Now you can see that that green line really drops off 2008, 2009. That’s when lending standards really tightened, that’s when we were required to have a more qualified buyer. So those who are securing home loans today, you can see that green line really hovering along at the bottom, are much more qualified buyers, more likely to repay their loans and not go into foreclosure. So that’s a huge difference that we have today  https://www.mba.org/news-research-and-resources/newsroom https://www.mba.org/news-and-research/newsroom/news/2022/07/12/mortgage-credit-availability-decreased-in-june

Finally, inventory could come from distressed properties like foreclosures and short sales. The mortgage credit availability index shows how much harder it has become for someone to secure a home loan as lending standards have tightened.  More qualified buyers means less distressed properties.

this is US properties with foreclosure filings. and it shows foreclosure activity by year. You can see those red bars are when we had over a million foreclosures per year, a million foreclosure filings per year in the housing market, and the lending standard tightening that I showed you, did this, made it drop right down consistently, starting especially in about 2011, fewer and fewer foreclosures every year in this country. Now you can take 2020 and 2021 out for a second, because we know we had a moratorium on foreclosures in that time period, but overall tightening lending standards really changed the game with a more qualified buyer.  https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2021-u-s-foreclosure-market-report/

There are fewer and fewer foreclosures every year in this country, and especially in the past year or two due to the moratorium on foreclosures.

 foreclosure activity by year. Now this is for January through June of every year going back to 2008, so the first half of the year. That’s the latest data we have right now, so it’s the best comparison for you to see where are we today in 2022, knowing that there are more foreclosures coming back to the market. Now it’s not a flood of foreclosures because what you can see is 2022 over on the right has just under 165,000 foreclosure filings this year so far. We can compare that back to 2020, pretty much on par with 2020, not even as much as we had in 2018 or 2019. So moving back in the direction of a pre pandemic year, but not a flood like we had in those red bars where millions of homes were coming to the market as foreclosures. I think we could really look at this and say lending standards have changed the game. We know that there are more foreclosures coming to the market this year, but it’s nowhere near anything that could cause the market to crash with a wave of foreclosures. So our hearts go out to anyone who’s in this situation. We never want to see anyone go through this process, but we’re certainly not looking at a crisis or a crash that would cause prices to decline significantly because of inventory coming from distressed properties.   https://www.attomdata.com/news/market-trends/foreclosures/attom-midyear-2022-u-s-foreclosure-market-report/

Looking at foreclosure activity by year, going back to 2008, we are seeing about half of the foreclosures compared to pre-pandemic numbers and less than 10% of post-2008 numbers. Lending standards have changed the game.

This is now a monthly report and it’s the loans upon exiting the forbearance program. So this is current as of the very end of June, and what it shows is that 36% of mortgages coming out of forbearance were actually paid off, brought current, all set, people staying in their homes, no issues whatsoever, just walking away from forbearance, staying in their homes. That’s huge, but what’s even more important is if you look at this blue section, 45% were workouts or repayment plans. So people who were able to do modifications, loan deferrals, they went back to their banks and they changed their situation, and that’s huge. This is the opportunity that homeowners didn’t have in 2008, that they have today, is to work out a plan so they don’t have to lose their homes. Banks were up and down that they didn’t want that to happen ever again and the forbearance program changed the game. So what this really shows is if you put the green and the blue together, that four out of every five homeowners coming out of forbearance are just fine. They’re staying in their homes. They’ve worked out of plan. They’ve paid off their loans. Now there is that orange section of those who are still in trouble, 17% have no loss mitigation plan coming out of forbearance, and so that’s created some concerns, but truly, those homeowners with today’s growing equity and appreciating home values, have enough equity to be able to sell their homes, make a move and avoid the foreclosure process. So people today have different options that they didn’t have before and that is huge. That is changing the landscape and one of the biggest reasons why we won’t see a wave of foreclosures coming to the market. Right now we only have about 400,000 homes that are actually in forbearance, and of course we don’t want any of those to go to foreclosure, but even if they did, even if all of those homes or even if those homeowners all sold those homes, we have such an under supply of homes on the market today that they’d be scooped up instantly, and it wouldn’t cause a crash for the market.   https://www.mba.org/news-and-research/newsroom/news/2022/07/18/share-of-mortgage-loans-in-forbearance-decreases-to-081-in-june

36% of mortgages coming out of forbearance were paid off. 45% worked out repayment plans (modifications, loan deferrals, etc) – an opportunity that homeowners didn’t have in 2008. The forbearance program changed the game. 4 out of 5 homeowners are coming out of forbearance. However, 17% have no loss mitigation plan, but mostly have enough equity to be able to sell their homes and avoid the foreclosure process. Today, there are different options, and why we won’t see a wave of foreclosures coming to the market. If all 400,000 homes in forbearance came to market, it would still be under supplied.

Foreclosure activity... continued its slow, steady climb back to pre-pandemic levels in the first half of 2022... While overall foreclosure activity is still running significantly below historic averages, the dramatic increase in foreclosure starts suggests that we may be back to normal levels by sometime in early 2023. Rick Sharga, Executive VP of Market Intelligence, ATTOM

The increased amount of foreclosures this year could be due to the lack of foreclosures the past two years.

So I think if look at this perspective, the three places where inventory comes from today, if you look at months inventory of homes for sale, even if we have homes coming from all three of those places, we’re still in a seller’s market. That’s that green line down on the bottom. You can see where it says today right in the center, that inventory line is rising. It is climbing and that is great news for the housing market, but nowhere near those 2008 to 2010 regions, where we truly had an oversupply of homes on the market that caused the housing market to crash. So as we think about that, three places where inventory comes from, existing homes, new homes and distressed properties, nothing that would cause the market to crash  nar.realtor https://www.nar.realtor/topics/existing-home-sales

Today, we are in a seller’s market, but what does the rest of the year hold?

This chart is a look at mortgage rate projections that were just released in July from Freddie Mac, Fannie Mae, MBA, and NAR. Now, if we look at these across the board, we can average them all out over each quarter, and that right column shows the average of all four. So what is it telling us? It’s really saying that mortgage rates are projected to kind of hang in this steady space right about where we are right now. So mortgage rates being a little more stabilized next year. So that’s great news for buyers who you know might have been priced out of the market or you know have pressed pause on their plans because mortgage rates have been rising so rapidly.   https://www.freddiemac.com/research/forecast/20220720-quarterly-forecast-market-slowdown-will-continue-high-rates-and-prices-exacerbate https://www.fanniemae.com/media/44131/display https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-july-2022.pdf https://cdn.nar.realtor/sites/default/files/documents/forecast-q2-2022-us-economic-outlook-04-27-2022.pdf

Freddie Mac, Fannie Mae, the Mortgage Bankers Association, and the National Association of Realtors® are predicting mortgage rates to waiver around the current rate with a more stabilized rate next year.

There could be “a potential silver lining” for the market, he added, as stabilizing mortgage rates and rising inventory “may bring some buyers back to the market during the second half of the year.”  CNBC, Quoting Joel Kan, Economist, MBA
surveyed almost 400 agents and asked what’s the biggest question that your clients are asking you right now – it’s about a crash and it’s about pricing. They want to know where are prices headed? Well, if you look at what the experts are saying, this is the home price forecast for 2022. We follow seven key industry leaders on home pricing. These get updated, some monthly, some quarterly, and if you look at them and average them all together, the average of all seven is showing 10.3% home price appreciation through the end of this year. So as we look at this year, we are certainly seeing a slowing, a decelerating price appreciation. Last year we saw an average of 15% according to CoreLogic, homes appreciated by 15%. We’re not necessarily looking at that much appreciation, but nationwide in most markets, experts are saying an average of 10.3% appreciation going forward.   https://www.fanniemae.com/media/44131/display https://www.freddiemac.com/research/forecast/20220720-quarterly-forecast-market-slowdown-will-continue-high-rates-and-prices-exacerbate https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2022-us-economic-outlook-07-27-2022.pdf https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/ https://pulsenomics.com/surveys/#home-price-expectations https://www.zelmanassociates.com/ (subscription required) https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-july-2022.pdf

Looking at what the 7 key industry leaders are saying about home pricing, we are seeing about 10.3% home price appreciation through the end of this year. A more moderate growth than the 15% we saw last year, but still extremely healthy appreciation in most markets.

I don’t think national housing prices will decline in a meaningful way, . . . but there will be some price declines across the country.  Mark Zandi, Chief Economist, Moody’s Analytics
There is also a decrease in home sales due to the softening of buyer demand in light of the rising mortgage rates. The National Association of Realtors® is saying that, at the current pace of sale today, we are projected to sell 5.1 million homes in this country this year.    Now look at that compared to 2020 and 2021, it’s a drop off, right? Those were exceptional years. They were out of the ordinary. Existing home sales through the roof due to all of the record low mortgage rates, the changing needs of the pandemic, all the things. And what this probably feels like right now is this analogy you’ve heard us use so many times, last year you were driving down the road at 80 miles an hour, you were cruising and you came around a corner and you saw the flashing lights and you slammed on your brakes and suddenly you’re going 60, 65, and it feels like you’re crawling. That may be what you’re feeling right now when it comes to home sales, however, you’re still going the speed limit, because if you look at the green bar compared to the pre pandemic years, 2018, 2019, much more in line with pre pandemic years, and let’s not forget, those were great years in real estate. So home sales softening a bit, but still projected to sell 5.1 million homes in this country.   https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales https://cdn.nar.realtor/sites/default/files/documents/ehs-05-2022-overview-2022-06-21.pdf

There is also a decrease in home sales due to the softening of buyer demand in light of the rising mortgage rates. The National Association of Realtors® is saying that, at the current pace of sale today, we are projected to sell 5.1 million homes in this country this year. Of course, that is a decrease considering the sales the past 2 years, which were extraordinary years in the real estate market. The 5.1 million projection puts us back in line with the pre-pandemic years of 2017-2019.

And if we look at that from a total home sales forecast, this is from Freddie, Fannie, and MBA, we can see that those blue bars were what the experts forecast in January, that was before mortgage rates took their climb, and the re-forecast in the green bars is the latest from July of 2022. So latest data we have right now, a little bit of a softening in total home sales. We sold about 7 million homes last year. We’re looking more like anywhere between 5.8, 6.4 million homes for this year at the current pace. Now again, still very strong years in real estate, and what I want you to think about too is that this is pretty typical for the experts to re-forecast coming in high at the beginning of the year, we see how the year has kind of shaken out and they re-forecast. 2020 was a great example, forecaster down and then we exceeded expectations and sold a record number of homes that year. So the re-forecasting is very typical in the industry. So mortgage rates projected to hold fairly steady. Home sales softening just a little bit and prices projected to continue rising at a little bit more of a moderate rate in most markets.   https://www.freddiemac.com/research/forecast?page=0 https://www.fanniemae.com/research-and-insights/forecast/forecast-monthly-archive https://www.mba.org/news-and-research/forecasts-and-commentary/mortgage-finance-forecast-archives

In lieu of the rising mortgage rates, Freddie Mac, Fannie Mae, and the Mortgage Bankers Association re-forecasted their home sales predictions for 2022 from 7 million to 6 million. Still a very strong number, which should hold steady as the interest rates begin to balance out.

three reasons to buy a home today. If you think about the forecast where home prices are, buying before prices rise higher, mortgage rates holding kind of steady. Inventory is starting to tick up and come back to the market. There are three things that are happening right now that are creating a great scenario. April the average home sold had 5.5 offers. If you look over on the left, it ticked down to 4.2 in May, 3.4 in June. That is a trend that we are seeing going forward. Fewer homes selling above asking price, you can see that percentage has ticked down from 61% to 51%, but don’t get me wrong, still a very competitive market if 51% or half of homes are selling over asking, this is definitely still a competitive market, but a better time for buyers to jump in if they’re ready to find a home and supply of homes for sale is growing. You can see that inventory, that month’s supply ticking up as the pace of home sales and more homes came back to the market. So certainly not easy to find a home, but right now there’s no doubt it’s still very competitive, but definitely not as impossible as it may have felt for those who probably stepped out of the process last year or the beginning of this year.   https://cdn.nar.realtor/sites/default/files/documents/2022-05-realtors-confidence-index-06-21-2022.pdf https://cdn.nar.realtor/sites/default/files/documents/2022-06-realtors-confidence-index-report-07-20-2022.pdf https://www.nar.realtor/topics/existing-home-sales https://www.nar.realtor/newsroom/existing-home-sales-slid-5-4-in-June https://www.globenewswire.com/news-release/2022/05/19/2447085/0/en/Existing-Home-Sales-Retract-2-4-in-April.html

Today there are fewer multiple offer scenarios, fewer homes selling above asking price, and the supply of homes for sale is growing – all providing a great scenario for buyers right now. We have dropped from 5.5 offers on a home in April to 3.4 in June. We’ve gone from 61% of homes selling above asking price to 51% – still competitive, but decreasing. Finally, inventory has creeped from 2.2 months supply on hand to 3.0. All three trends that should continue moving forward.

If you’re thinking about making a move, you probably want to know what’s going to happen to home prices for the rest of the year. While experts say price growth will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won’t fall. Here’s a look at two key reasons experts forecast continued price growth: supply and demand.

While Growing, Housing Supply Is Still Low

Even though inventory is increasing this year as the market moderates, supply is still low. The graph below helps tell the story of why there still aren’t enough homes on the market today. It uses data from the Census to show the number of single-family homes that were built in this country going all the way back to the 1970s.

What’s Causing Ongoing Home Price Appreciation? | MyKCM

The blue bars represent the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That’s because buyer demand was so high due to loose lending standards that enabled more people to qualify for a home loan.

The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses – and that led to a long period of underbuilding of new homes. And even as more new homes are constructed this year and in the years ahead, this isn’t something that can be resolved overnight. It’ll take time to build enough homes to meet the deficit of underbuilding that took place over the past 14 years.

Millennials Will Create Sustained Buyer Demand Moving Forward

The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, data tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years (see graph below):

What’s Causing Ongoing Home Price Appreciation? | MyKCM

Odeta Kushi, Deputy Chief Economist at First Americanexplains:

 “. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.”

That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate says:

“After all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials.”

What This Means for Home Prices

If you’re worried home values will fall, rest assured that experts forecast ongoing home price appreciation thanks to the lingering imbalance of supply and demand. That means home prices won’t decline.

Bottom Line

Based on today’s factors driving supply and demand, experts project home price appreciation will continue. It’ll just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels.

Let’s begin this month with the topic of economic slowdown. According to The Wall Street Journal, recession fear surged among CEOs. Three-quarters of global CEOs say that we are in a recession or will be in the next 12 to 18 months. A recession is typically two consecutive quarters of negative GDP. We saw negative GDP in the first quarter of this year, and forecasts coming out of the Atlanta Fed predict an extremely low negative GDP in the second quarter.

Throughout history, during a recessionary period, interest rates go up at the beginning of the recession. But in order to come out of a recession, interest rates are lowered to stimulate the economy moving forward. Historically, we have seen a repeated uptick in interest rates followed by lowered interest rates.  Mortgage Specialist
Let’s look at prior recessionary periods, going all the way back to the early seventies. And this outlines in blue there, the graph mark, there the 30-year fixed interest rate. And then the boxes there that are highlighted in yellow are recessionary periods. This is what typically interest rates have looked like in a recessionary period. I’m going to give you another look at it here in just a minute, but I think it starts to bring this perspective and certainly here on the other end, the rise in interest rates that we’ve seen more recently here in the first six months of this year. But if we break this down and sort of convert it to a table versus this visual chart, so I’m going to use the visual chart, but then I want to break it down by this table right here and say, okay, in each recession that we’ve had in this country going back to the early 80s, what has happened to the mortgage interest rate? And so this gives you that from when it actually happened, how long it happened, and what was the starting interest rate and what did it fall to. And there’s one thing that every one of these recessions has in common and it’s that in each instance, mortgage rates fell.   http://www.freddiemac.com/pmms/ https://mtg-specialists.com/2022/05/11/recession-interest-rates-and-real-estate/

Looking at the mortgage rates in prior recessionary periods going all the way back to the early seventies, we can see that in every recession mortgage rates fell.

Over the past five recession, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases they continue to fall after the fact, as it takes some time to turn things around, even when the recession is technically over.   https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States https://mtg-specialists.com/2022/05/11/recession-interest-rates-and-real-estate/

Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak to the trough. Right now, the Fed is raising the funds rate to tame inflation, and in order to do that they have to slow down the economy. You may have heard of the Fed trying to engineer a “soft landing” in which growth is positive and moderate. If a soft landing is not engineered, then you end in recession – a likely outcome at this point.

 that recession doesn’t equal a housing crisis. And this is the survey that goes back to the early eighties and says what happened to housing prices? We just looked at interest rates. What happened to housing prices? Four out of the six times we were in a recession, homes appreciated. Two times they fell. Once, marginally in the early nineties and the other time was in 2008. The thing I would say here is ever since 2008, the word recession has taken on a new meaning for people and for very good reason. There are a lot of people that were hurt, a lot of people who were impacted, a lot of people who saw family members that were hurt. During the 2008 recession our business was at the epicenter and any of us that were in the business certainly remember that and certainly remember the times that we went through during that.  https://www.corelogic.com/blog/2019/03/housing-recessions-and-recoveries.aspx https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011 https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/

Here is where it is important to remember that a recession does not equal a housing crisis. Four out of the last six times we were in a recession, homes appreciated in value. The two times they fell – marginally (1.9%) in the early nineties and in 2008 (an outlier due to lax lending standards).

There has been a pickup in the inventory that we've seen recently, but it's not from a big increase in new listings... but rather a slowdown in the pace of sales. And remember that months’ supply measures the inventory of sale relative to the pace of sales. Same inventory, fewer sales, means more months’ supply.  Mark Fleming, Chief Economist, First American

Delving into an update on housing inventory, we are seeing the average number of offers received on a home for sale decline. We saw 5.5 offers in April, which decreased to 5, and then 4.2 in June. The rising mortgage rate environment is starting to soften demand. But, keep in mind, at an average of 4.2 offers on homes for sale, we are still well above the pre-pandemic norm, suggesting the market is still very competitive.

Over asking price offers are also declining, from 61% of offers over the asking price last month to now 55%. Not a huge decline, but certainly a softening or a moderation. All of this leading to a slower pace of sales and rising inventory levels – same inventory with fewer sales means more month supply.

So we know that the month supply of inventory of homes is increasing. It was record low in January of this year at 1.6 months and we’ve ticked up the latest data showing us 2.6 months of inventory. Now, that’s not a huge increase, but it certainly means more options for buyers when there’s more inventory on the market. Now remember, a balanced market, however, is six months of inventory and we haven’t seen that since 2012. So we’re nowhere out of the woods on where we need to be with inventory to meet that balance market but we’re certainly moving in the right direction.   https://www.nar.realtor/topics/existing-home-sales https://www.nar.realtor/newsroom/existing-home-sales-fell-3-4-in-may-median-sales-price-surpasses-400000-for-the-first-time

The months supply of inventory was at a record low in January at 1.6 months, and the latest data is showing us at 2.6 months of inventory, so there are more options for buyers. Remember that a balanced market is six months of inventory – a number we haven’t seen since 2012.

new monthly listing counts are increasing. That’s what you can see here from Realtor.com. So more new inventory, more new listings coming to the market this year, and they’re ticking up at a faster pace. So April to May, that’s increasing at a faster pace than we did last year at that time. So that’s huge. That means that there are more new listings coming to the market for buyers and there are more options available. But what’s happening at the same time, and this is what you heard in that quote from Mark Fleming, is that the pace of sales is slowing.  https://www.realtor.com/research/data/

New monthly listing counts are also increasing. More new listings are coming to market than last year and they are increasing at a faster pace.

So this is the existing home sales, seasonally adjusted annual rate from NAR. we are projected to end the year at 5.4 million home sales by the end of 2022 if we continue at the pace we’re selling homes today. Now, we know that that pace has softened because of rising rates, economic pressures, inflationary pressures, all the things that are impacting the housing market right now. So the pace of sales is slowing. And when you compare that to last year and the year before, we have to remember that it’s slower than then because those are absolutely incredible years. They were an anomaly in the housing market. But where we are today in that green bar is returning more towards the direction of those pre-pandemic years, the 2018, 2019, and we have to remember that those were great years in real estate. So when we think about this contextually, yes, the pace of sales is slowing, but we’re slowing back to the pre-pandemic years, which were fantastic years for the housing market.   https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales https://www.nar.realtor/newsroom/existing-home-sales-retract-2-4-in-april

We are projected to end the year at 5.4 million home sales by the end of 2022 if we continue at the pace we’re selling homes today, but we know that the pace of sales in slowing due to rising rates, economic pressures, and inflationary pressures. Definitely slower than the past two years, which were incredible years for real estate and an anomaly in the housing market. So we see the return to those pre-pandemic years, which were great years in real estate.

Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance.  Lawrence Yun, Chief Economist, NAR
Active inventory continued to grow, rising 21% above one year ago... In other words, we’re starting to add more options, but the market needs even more before home shoppers have a selection that’s roughly equivalent to the pre-pandemic housing market. Danielle Hale, Chief Economist, Realtor.com

We still have far more buyers than we have sellers, which is continuing to put upward pressure on prices.

And what it shows us is that at the beginning of the year, realtor.com projected that we would have a 0.3% increase in inventory, so very small. They have re-forecasted for the rest of the year a 15% increase in inventory. A lot of that largely has to do with the softening or the slowing in the pace of sales and that uptick in new listings. So more inventory coming to the market. They’re seeing more in the projections. That’s going to create options for buyers.  https://news.move.com/2022-06-13-Realtor-com-R-2022-Forecast-Update-Real-Estate-Gets-a-Refresh-from-the-Frenzy

realtor.com’s originally projection for this year was a 0.3% increase in inventory. They have re-forecasted for the rest of the year a 15% increase in inventory – an increase likely representative of the slowing in the pace of sales and an uptick in new listings. Typically, a one month increase in supply translates to a 3% decline in annualized house price growth – something we are already seeing. Keep in mind that prices are still projected to increase, just at a more moderate rate. Decelerating home prices do not mean depreciating home prices. A decelerating environment means there’s appreciation, just at a more moderate rate – single digit growth as opposed to the double digit growth we have recently seen.

The average of those forecasters 8.5%. Now, I think of this as an important point that we need to focus in on. Forecasters are calling for appreciation, but we have to really understand why they’re calling for appreciation. But when you look across from Fannie, Freddie, CoreLogic, all of these forecasters, the average of 8.5% appreciation, not what we saw last year, tremendous appreciation, we said, gosh, this feels too hot, and coming in this year with something a little bit more normal. Now, these forecasts started the year at about 5% and they’ve ratcheted up. They’ve kind of settled in here right about 8%. If you remember on the monthly market, we’ve called for between 8 and 10% appreciation. But you’re seeing that moderation through rising interest rates. Price will always be determined by supply and demand.  https://www.fanniemae.com/media/43571/display https://www.freddiemac.com/research/forecast/20220418-quarterly-forecast-purchase-market-will-remain-solid-even-mortgage-rates-rise https://www.corelogic.com/intelligence/find-stories/corelogic-hpi-posted-record-year-over-year-growth-in-2021/ https://pulsenomics.com/surveys/#home-price-expectations https://cdn.nar.realtor/sites/default/files/documents/forecast-q2-2022-us-economic-outlook-04-27-2022.pdf https://www.zelmanassociates.com/ (with subscription) https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-june-2022.pdf?sfvrsn=e3eb1d80_1

The average of the home price forecaster is 8.5% for 2022. Price will always be determined by supply and demand, so we will want to look at Home Price Expectation Survey.

This is 100 economists, housing market experts, those that are in the know with housing across this country. But they survey every quarter and they say, what do you see for appreciation this year and the four years ahead that make kind of a five-year window. And you can see it right here, from the Home Price Expectations Survey, 9.3% appreciation, sort of in line with what we saw in the other forecasters, 8.5%, 9.3%, that 8-9% range and then 4, 3, 4%, as you see in the years going forward. So my message right now, based on what experts are saying is you’re likely to see a good appreciation in housing this year. The average going back 3.8% in residential homes across this country and appreciation and in ‘23, ‘24, ‘25, looking at more normal appreciation.   https://pulsenomics.com/surveys/#home-price-expectations

The Home Price Expectation Survey is comprised of 100 economists and housing market experts across the country. The survey occurs each quarter and forecasts appreciation for the current year and the four years ahead – to make a five-year window. Again, we see that 8-9% range and then about 4% going forward.

The root issue of what drives house prices almost always is supply and demand...  now interest rates affect that. When interest rates go up, guess what, fewer buyers. The demand goes down thus prices are going to soften or not be as cray-cray as they have been. And that’s what we’re seeing right now.  David Ramsey, Personal Finance Personality

With prices being determined by supply and demand, let’s take a look at supply first.

single family housing units completed, going all the way back to the seventies. Everything in the blue there, every year the number of single family housing units brought to market is pre-2008, everything before the housing crisis. In the bar there, the average annual units completed reference the 50-year average in the number of homes brought to market. \So for the last 14 years, we have been below the 50 year average in the number of builds brought to market.  www.census.gov/construction/nrc/xls/co_cust.xls

For the last 14 years, we have been below the 50 year average in the number of builds brought to market. Builders were affected greatly in 2008, and maybe may moved on to other vocations, but it looks like we will surpass the 50 year average soon.

the millennial generation, largest generation behind the baby boomers, just a little bit behind in sheer size of the generation. But they’re moving through the peak home buying years. According to NAR, in their recent Home Buyer survey, 81% of first time home buyers fall in this category, in this age range; 43% of all buyers fit in this category. So tremendous, tremendous demand, tremendous, tremendous volume coming from those that want to buy, driven by the millennial generation.   https://data.census.gov/cedsci/table?q=United%20States&t=Populations%20and%20People&g=0100000US&tid=ACSST5Y2020.S0101 https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise

The demand side is driven by millennials that are moving through the market. The millennial generation is the largest generation behind the baby boomers, and they’re moving through their peak home buying years. According to the National Association of Realtors® (NAR) Home Buyer survey, 81% of first-time home buyers fall in this category, and 43% in this age range.

Bottom Line

Experts don’t believe the market is in a bubble or a crash is in the cards like during the Great Recession.

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