Weekly Housing Market Headlines
Housing Market Headlines this week, September 19, 2023
Builder confidence in the single-family housing market fell 5 points in September to 45 on the National Association of Home Builders/Wells Fargo Housing Market Index. The decrease follows a 6-point drop in August. Anything below 50 is considered negative.
Builders cite weaker affordability due to higher mortgage rates. The average rate on the popular 30-year fixed mortgage has been over 7% since June.
As a result, builders are starting to offer more incentives again. In September, 32% of builders said they cut prices, compared with 25% in August. That’s the largest share of builders reducing prices since December 2022, when 35% were doing so.
The average price cut was 6%.
“High mortgage rates are clearly taking a toll on builder confidence and consumer demand, as a growing number of buyers are electing to defer a home purchase until long-term rates move lower,” said Robert Dietz, NAHB’s chief economist, in a release.
A shift is also occurring among those buyers who are still in the market. The NAHB added a new question to this month’s survey and found that 42% of new single-family home buyers year to date were first-time buyers. That is much higher than the historical norm of around 27%.
No Mass Foreclosures On the Horizon
Share of homes with negative equity remains low in California. Roughly 2% of all mortgaged properties, or 1.1 million homes, were underwater or had negative equity last quarter. California had a share of homes with negative equity at 0.8%, which was the lowest of all states reported by CoreLogic.
California Housing Market Crash?
In August 2023, home prices in California were up 5.0% compared to last year, selling for a median price of $793,600. On average, the number of homes sold was down 14.7% year over year and there were 24,937 homes sold in August this year, down 29,231 homes sold in August last year. The median days on the market was 27 days, down 5 year over year.