Housing Market Cools, Not Expected to Last

Home Prices Up 30 Percent Since 2020
by

With multifamily construction growing nearly 17 percent and existing home sales down two percent, the housing market is also bracing for an interest rate spike.

x

With multifamily construction growing nearly 17 percent and existing home sales down two percent, the housing market is also bracing for an interest rate spike.

The housing market is showing signs of stabilizing after this period of cooling however, housing affordability will decrease in the coming quarters.

Home prices are up more than 30 percent across the country on average since the beginning of 2020. Meanwhile, interest rates will rise as the Federal Reserve tightens the monetary policy. The 10-year Treasury rate has increased by 37 basis points since the start of August while consumer confidence declined to a seven-month low in September because of the pandemic and inflation concerns.

 

The NAHB/Wells Fargo Housing Market Index (HMI) rose one point to 76 in September. Last November saw a data series high of 90.

Multifamily starts are up nearly 17 percent year-to-date. Housing starts increased in August due to strength in apartment construction, there are now more single-family homes under construction than apartments for the first time since 2013.

According to the National Association of Realtors, existing home sales decreased two percent in August. Higher prices are believed to have slowed resale demand; however, inventory continues to limit sales and encourage more construction.

https://nahbnow.com/2021/10/affordability-headwinds-will-increase/

Filed Under: HOUSING MARKET, CONSTRUCTION, STATS