Housing Market News for the Week of June 17, 2022

2022 Realtor.com Housing Market Forecast Midyear Update: More Options for Home Shoppers

  • Mortgage rates have been revised upward to reflect the major shift in monetary policy and financial conditions over the last 6 months.
  • Going forward, home price growth cools, but it has remained hotter for longer than originally anticipated leading to an upwardly revised projection of 6.6% home price growth for 2022
  • Home sales slow, shifting our original 2022 growth expectations to a decline of 6.7%. While we now forecast a notable step down from 2021, home sales on par with these projections would mean that 2022 sales are the 2nd highest tally since 2007, trailing only 2021. 
  • The number of homes for sale grows more than originally projected. The growth is driven by a combination of more sellers and a slowing home sales pace. 

Read more from Realtor.com.

What the Fed's Rate Increase Means for Mortgages

What does the Fed’s decision to raise its key interest rate by three-quarters of a percentage point mean for mortgages?

Rates on 30-year fixed mortgages don’t move in tandem with the Fed’s benchmark rate, but instead track the yield on 10-year Treasury bonds, which are influenced by a variety of factors, including expectations around inflation, the Fed’s actions and how investors react to all of it.

“We are seeing rates move up pretty briskly and a lot of that has to do with forward-looking expectations with where things are headed,” said Len Kiefer, deputy chief economist at Freddie Mac. “Maybe inflation will be stickier than the market thought.”

Read more from The New York Times.

How Much Do Buyers Really Know About the Buying Process?

New study shows the importance Realtors® have in explaining the homebuying process to clients.

Friends and family are most consumers’ go-to for information on real estate.

Fifty-eight percent rely on real estate experts and 47% seek information online, according to a recent MoneyWise report. And the information people are getting isn’t all that accurate. Nearly 40% of consumers in the survey couldn’t correctly define closing costs, 42% couldn’t define annual percentage rate as well as mortgage and 46% didn’t know what appreciation was. Close to half (48%) couldn’t correctly define down payment or offer and half couldn’t define interest. A whopping 62% could not define mortgage rate.

Pennsylvania Association of Realtors® President Christopher Beadling said, “This study shows what an important role we as Realtors® have in explaining the homebuying process to our clients. Most consumers purchase a home just a few times in their lives and really look to us to help guide them through the entire process from the start to the close.”

Read more from the PA Association of Realtors.

Redfin Reports Housing-Market Competition Dropped to a 15-Month Low in May

Nationwide, 57.8% of home offers written by Redfin agents faced competition on a seasonally adjusted basis in May, the lowest level since February 2021, according to a new report from Redfin, the technology-powered real estate brokerage. That’s down from a revised rate of 60.9% one month earlier and a pandemic peak of 68.8% one year earlier, and marks the fourth-consecutive monthly decline.

The typical home in a bidding-war received 5.3 offers in May, down from 6.8 in April and 7.4 in May 2021, according to data submitted by Redfin agents.

Read more from Yahoo Finance.

The Future is Now: Home Electrification

From vehicles to lawn tools, electric features are here to stay and growing in popularity, which means homes need to be equipped to handle the demand.

Key takeaways:

  • As the demand for electric vehicles, solar battery backups, and electric tools increase, so too will the need for charging options at home.
  • Retrofitting existing homes might mean upgrading electrical panels or coming up with creative solutions in the garage.
  • Electric is here to stay, and builders will want to plan for sufficient charging capacity in new homes.

According to Sense, an energy monitoring company, household energy consumption rose at the onset of the pandemic and will likely continue to increase. Several factors contributed to the increase, such as more people staying home because of COVID-19 protocols, extreme weather, and warmer summers. Another is the ongoing trend toward increased household electrification, which consumers are turning to in an effort to lower carbon emissions and fuel-related costs.

Increased production and demand for electric vehicles will push the need for home-based energy consumption even further. Currently, there are 20 completely electric vehicles available in the U.S., comprising about 4% of the market; that share is expected to grow exponentially in the coming years. Automobile makers currently project that an average of about 50 percent of vehicle sales will be of electric vehicles by 2030.

General Motors is committed to offering 30 electric vehicles by 2025, and Ford expects 40% to 50% of its vehicle volume to be fully electric by 2030.

Read more from NAR's Realtor Magazine.

Mortgage Market Update

Mortgage rates surged as the 30-year fixed-rate mortgage moved up more than half a percentage point, marking the largest one-week increase in our survey since 1987. These higher rates are the result of a shift in expectations about inflation and the course of monetary policy. Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market.


We hope you enjoyed this week's Market News. For more information about how we can help you, please contact us.


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Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570.