Housing Moves – The Recent Housing Market Data
The housing market can be described by Liverpool’s performance in the last few years. Just 2 years ago, it was red hot, attempting to break all sorts of records, but this past year has been extremely terrible. If we were to find the reason why, nothing is more obvious than the rate hikes the Federal Reserve has implemented in the last year in order to combat inflation, which indeed causes house prices to rise historically.
January marked the 12th straight month of lower sales in the housing market, falling by 0.7 percent from a month earlier and a whopping 36.9 percent less than January of 2022. The rise in interest rates has correlated with the increase in mortgage rates, which is making it harder for consumers to afford buying a house as the cost is now rising. This is quantified by a 6.32% increase in the average rate on a 30-year fixed mortgage in the past week. Pairing this with economic uncertainty has sapped demand recently, although that hasn’t managed to bring down prices. The median home price rose by 1.3 percent, a slowdown, but the overall rise in home prices over the pandemic has made housing accessibility a major issue in the United States. As a way to combat this, the Biden administration plans to cut mortgage insurance costs for lower-income families through the Federal Housing Administration by 0.3 percentage points. Although it may not seem like much, it is the most they can do at the moment especially as spring buying season comes in and the economy continues to heal.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.