In recent weeks, we've seen mortgage rates increase which has caused mortgage application activity to slow. The sector was slowly coming back to life as the market saw a nice decrease in home borrowing costs after they hit multi-decade highs last November.
We are still seeing higher costs to purchase a new home while sellers continue to hold out for higher bids. Redfin's Homebuyer Demand Index, a gauge of requests for tours and other services, fell 1% in the latest reading, the first decline after four weeks of increases, and mortgage-purchase applications fell 6%.
Buyers also continue to see persistently low inventories of homes for sale on the market. On the other side, 85% of mortgage holders have a rate well below the current level of just above 6% and may not be ready to give up that low rate.
Also in mortgage news, there has been a jump in home purchase cancelations where potential buyers are willing to give up $5 thousand to $10 thousand or more in down payments. Potential borrowers may be feeling that now may not be the best time to purchase due in part to possible economic conditions, job, or affordability reasons.
KB Homes recently reported that home purchase cancelations spiked 68% in Q4 2022 compared to an increase of 13% in Q4 2021 while Lennar Corp saw a jump of 26% from 12% in the same period. Luxury home builder Toll Brothers reported 20% from 4.6%.
Taking the above into account ... purchasing a home is historically a good investment and the feeling of owning your own home is euphoric.
Bottom line: Having a place to call your own, to hang your hat has always been part of the American dream. Although rates have increased and our market is ever-changing, it's never a bad time to buy a home.
Sources: Totalhometx.com, Techhive.com, Extraspace.com
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You’re browsing condos along the Jersey Shore using this website, but did you know we also have some other websites and our own Real Estate App to help you with your search.
- HolidayCityHomes.com – buying or selling in NJ’s premier 55+ community?
- OpenHouseNewJersey.com – for Open Houses in Ocean or Monmouth Counties?
- JerseyShoreCribs.com – for renters & landlords along the Shore
- JerseyShoreHomez.com – for buyers & sellers in the top Shore towns
- Exit135.com – Search for homes in Union, Morris, Somerset Counties
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