Let’s take a look at where some of the key measurables are currenty at for the US housing market …
Home ownership rate - 62.9% the lowest rate since the Census began tracking this in 1965.
Mortgage rates - Still near historically low levels. Best credits can obtain 30 year financing in the mid 3’s and 15 year financing in the high 2’s.
Home price appreciation - Nationally, homes are appreciating at a little over 5% year-over-year right now. Over the last 30 years, existing homes have appreciated 3.4% year-over-year.
Existing and new home sales - Existing home sales have risen four months in a row, and new home sales in June were at their highest levels in eight years However, supply and affordability have most convinced these numbers could start to go the other way.
Inventory of existing homes for sale - Still too low, and down 4% year-over-year. We’re at about a 4.5 month supply of inventory. Six months or higher is considered healthy.
Availability of credit - Loosening but according to the CFPB, still too tight. Average FICO for homebuyers in Q2 - 756. Average FICO in America - 695.
TELL IT LIKE IT IS QUICK ANALYSIS - Home ownership is at all-time lows because credit is still tight, affordability for first time home buyers is not good, and in general, people 35 and under value home ownership less. The high end of the housing market is doing good, the low end, not so good. While low rates help refi levels, home buyers are generally tone deaf to low or falling interest rates at this point. Incredibly low delinquency rates on mortgages originated the last 7-8 years and quarterly profit checks from Fannie and Freddie have housing on the back burner politically.
TMC - Chief Operating Officer
President/CEO - Pulte Financial Services