Housing Market News for the Week of September 16, 2022

The Best Week Historically to Buy a House is Coming Up

The best time to buy a house starts Sunday, Sept. 25.

According to data from Realtor.com®, Sept. 25 through Oct. 1 is the best time to buy a home this year across the U.S. As the number of listings slowly grow, the site predicts that there will be 46% more active listings compared to the same week in 2021. Buyers should see around 780,000 listings this week. Generally, this time period has about 9.5% more listings than average and 12.9% more than the beginning of the year. The best week of each year for buyers usually offers about 4.2% more inventory than the average week and about 25% from the peak.

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Home Prices Drop in August

The turbulent story of America’s housing market has yielded yet another surprise twist.

After steadily climbing to the record-shattering apex of $450,000 in June, home prices are at long last taking the plunge. From July to August, national prices dropped from $449,000 to $435,000, their most significant month-to-month plunge in data history dating back to 2016, according to a new report by Realtor.com®.

Granted, home prices in August are still up annually by 14.2% from a year earlier. But weary homebuyers may see a further break in the clouds come fall, which is generally the best time to buy a home.

The Value of Household Real Estate Hit Another High in the Second Quarter

Even if the value of homes were to universally decline by 10% from their level at the end of the first quarter, homeowner equity would still be at 67.2%, on par with fall 2020 which was then the highest level since 1989.

Last week, the Federal Reserve released its Flow of Funds data. This showed that rising home prices propelled home equity, a contributor to the wealth of homeowners, to a new high. The total value of owner-occupied real estate registered $41.2 trillion. Tempering this good new, a decline in financial assets and increase in debt reduced overall net worth for households and non-profit organizations by $6.1 trillion in the quarter.

Here’s what we learned: The value of homes hits yet another new high

For over a decade, home prices have climbed consistently, with an acceleration to double-digit pace over the most recent two years. While the more recent pace of home price growth is slower, this still translated to a new high median price at summer’s peak.

Mortgage Application Volume, Tiny Increase in Purchase Activity Ends 5-Week Slump

Only a slight uptick in purchase mortgage applications kept all last week’s volume indicators from falling for the fifth straight time. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis during the week ended September 9. The results include an adjustment for the observance of Labor Day. On an unadjusted basis, the Index decreased 12 percent compared with the previous week.

Mortgage Market Update

Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week. Although the increase in rates will continue to dampen demand and put downward pressure on home prices, inventory remains inadequate. This indicates that while home price declines will likely continue, they should not be large.

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.