Affordability in the Housing Market Improves in November

Affordability in the Housing Market Improves in November

My role as a broker at Windermere Van Vleet involves keeping a close eye on the housing market to provide my clients with the best possible advice and guidance. During the past few months, home buyers have had some slight relief regarding affordability. Due to declining home values and lower mortgage rates in November, the average mortgage payment cost dropped by about $100.

However, it’s important to note that monthly mortgage costs are still up $720 or 66.1% year-over-year. According to Zillow’s latest Market Report, the typical home is now worth $357,733, which is 0.2% less than in October and 0.5% less than the market peak in June 2022. The Federal Reserve’s increases in the nominal interest rate are primarily to blame for the currently cooling market.

But there is some good news. The recent pullback in mortgage rates has brought costs down for the first time since July, marking the second time in the past 19 months. While large-scale affordability concerns are expected to be around for a while, this news gives hope that affordability will at least stabilize going into 2023.

In the meantime, it’s worth noting that the housing market entered a “deep freeze” in November as buyers have paused their purchasing plans until after the new year in many cases. According to Zillow’s Senior Economist, Jeff Tucker, the two big questions now are whether mortgage rates will continue to decline and whether that will be enough to bring buyers back in time for the spring selling season.

While the slight drop in rates may not completely invigorate the market, affordability will continue to weigh on it, particularly during the traditionally slower winter months. In November, the number of pending listings fell by 16.5% from October and is down 38% compared to last November. Additionally, new listings, or the flow of existing homes onto the market from sellers, are also down 25.4% compared to the previous year. Many homeowners who may want to sell their homes are being deterred by the higher borrowing costs they’d need to pay on their next home’s mortgage.

The median time on the market is now 22 days, up from a low of six days in March 2022 and double from a year ago. On the other hand, inventory is up 7% year-over-year, the most significant increase since 2018. As a result, those looking for a new home may benefit from motivated sellers, unusual bargains, and less competition.

Despite some challenges in the housing market, it’s essential to keep in mind that there are still opportunities for those looking to buy or sell a home. The recent drop in mortgage rates and the hope for stability in affordability going into 2023 is positive news for those looking to move into the real estate market.

Now is a great time to take advantage of the current market conditions and make your move in the real estate world. Whether you’re looking to buy your dream home or sell your existing property, working with a knowledgeable and experienced real estate professional can make all the difference. As a broker at Windermere Van Vleet, I have the expertise and resources to help you succeed in your real estate endeavors. Don’t hesitate to contact me to discuss your needs and how I can assist you in making your real estate goals a reality.

Click here to see Zillow’s research in its entirety.