- Home Sales are virtually above The pace went through the years that followed the housing shop. This time this is because future buyers cannot afford one or two high-price housing and high mortgage rates, and sellers cannot afford to lose low rates.
At the moment, not many people buy and sell houses.
In January, the total sales of the house amounted to 4.7 million. This level is “only modestly above the weak speeds that experience a great recession from 2008 to 2010”, “” Wells Fargo Economists wrote in Recent research records. January is the latest data available for new and existing home sales. During the years before the pandemic, this total sales indicator usually hesitated about 6 million. During the pandemic housing boom, it was even greater.
The current economy is not like the financial crisis, but there are several things in the housing world that can explain this flaw. Housing prices have taken off all over the pandemic and Mortgage rates After the federal reserve system entered the tightening cycle to tame hot inflation. The combination of high housing and high mortgage rates is harmful, so fewer people buy houses because they cannot afford them. On the other hand, some who owns the home and either provided a low mortgage rate during a pandemic or not mortgage; phenomenon called The effect of blocking Only enhances the existing lack of houses from a decades of underestimation.
“The magic pace of sales at home cannot be accused of recession,” Wells Fargo writes. “Rather, the main factor for weighing housing is still unfavorable. In addition to high mortgage rates, housing prices continue to rise.”
Prices for housing no longer experience double -digit rates, and mortgage rates have decreased, but not enough to overcome the last five years. Since February 2020, Prices for housing increased by 45%and the average 30-year fixed mortgage is 6.67%; In February 2020, the mortgage rates were 3%. The country is still almost short four million houses too.
‘Significant improvement of adverse availability conditions currently preserved seemingly unlikely, given the increase in environment levels and structural deficiencies available houses while maintaining prices Wealth in an email. “This availability will remain extremely unfavorable for most buyers, it is expected that the pace of sales of the home will remain weak and near the low levels affected after the financial crisis.”
Wells Fargo only sees that the sales of the home only have improved modestly over the next few years. Moody’s forecasting is no different. This suggests a slight improvement in the volume of transactions this year before improving the next year.
But so far, ‘the conclusion of the interest rate is at a recession low level existing Wealth In a statement.
He responded from Wels Farga that the extremely low availability of housing is the wind for sales. Walsh said the average monthly and interest payment in the house increased more than doubled, Walsh said. The Moody’s Housing Accessibility Index, which measures a degree in which a typical average income family can afford a mortgage payment at the average price of the house, on average at the lowest level since the 1980s, he added. And Walsh does not see Walsh by the end of the year that the mortgage rates are significantly reduced.
Others have made a connection between home sales in the current housing cycle and a large financial crisis, although two economic periods are very different. Housing prices do not fall now, as then, and unemployment is not increasing. As the Redfin CEO Glen Celman One day told Fortuna, The economy can bloom, but housing has fallen into the recession.
Power Bust Sinoptics “poison ivy” Zelman Previously warned What existing at home sales were probably in the lowest of the great financial crisis, and she saw the years of depressive sales this year. Jpmorgan older markets economist Joe Sedil Previously wrote “Sales of existing houses are very depressed, as bad as after the global financial crisis.”
Originally this story was presented on Fortune.com
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2025-03-24 17:06:00
Alena Botros
