September 24, 2021
- To keep up with the rapid changes COVID-19 is causing in the economy and the housing market, the economics team at realtor.com® provides a weekly blog and video update on the relevant real estate and economic information you need to know to navigate the housing market in these tough times.
- This week, Director of Economic Research George Ratiu talks about the latest economic and real estate indicators, starting with the FOMC announcing that the Federal Reserve intends to start phasing out monetary stimulus in the near future. He mentions rising mortgage rates and continues with the latest Fed report showing household wealth has hit an all-time high. The data is tempered by the increase in jobless claims.
- George covers real estate market indicators that show movement toward normalization, starting with the weekly figures from Realtor.com (released by Chief Economist Danielle Hale) and continuing with sales of existing and new homes. He talks about the need for additional new homes to balance high prices and points to the delay in building single-family homes as homebuilder sentiment improves.
- George also highlights two new reports from Realtor.com highlighting homeowners’ mortgage payment burden (authored by Jiayi Xu, Danielle Hale and Sabrina Speianu) and their willingness to creatively leverage their home to generate income. .
- For more real-time updates, follow the realtor.com® the economic team on twitter: @rdc_economie.
- I am George Ratiu, Director of Economic Research at Realtor.com®.
- It’s officially fall, enjoying cooler temperatures and changing foliage colors, along with hints of pumpkin pie and brightly colored costumes. Financial markets provided a frightening run this week, with a steep drop on Monday followed by a choppy rebound.
- For the economy, the Federal Reserve’s early FOMC announcement underscored that the central bank views activity with cautious optimism and is preparing to withdraw monetary stimulus by cutting asset purchases. As a major buyer of mortgage-backed securities, the Fed’s actions will push mortgage rates up.
- In fact, following the Fed’s announcement, mortgage rates rebounded this week as bond markets began to incorporate expectations of central bank MBS withdrawal.
- The Fed also released an update on total household net worth and found that Americans’ wealth had jumped in late June to a new record high.
- On the employment side, the recovery continues to be a bit choppy, as the number of Americans claiming unemployment rose again for the second week in a row. Unemployment claims are near pandemic lows, but have yet to return to pre-pandemic levels.
- Real estate markets have remained stable on a normalization path reflecting more typical seasonal trends. Weekly data from Realtor.com shows housing markets are at a crossroads this fall. As new offers pour in, activity is calming after last year’s pandemic rush and home sales appear to be leveling off.
- Echoing our data, existing home sales declined in August as many buyers faced rising house prices at double-digit rates across the country.
- New home sales rose again, but remained below year-ago levels for the third consecutive month. With prices 20% higher than last year and a majority of new homes still under construction, buyers have fewer options.
- Housing clearly needs more new homes. This week’s new construction numbers reflect the move by home builders towards higher margin projects in a context of fluctuating costs, with single-family housing starts lagging behind multi-family projects.
- Meanwhile, after slipping in August, homebuilder sentiment picked up in September, with construction companies expecting more buyer traffic over the next six months and lower prices. lumber.
- The bright side is that, even with record prices, for many homeowners this year’s markets have kept the burden of mortgage payments below levels seen in previous peaks. However, as mortgage rates are expected to rise, affordability will remain at the heart of real estate activity.
- To round out this week’s update, we just released the results of a national homeowner survey and found that almost half are willing to creatively leverage their homes to generate income, which it is an extra bedroom, a separate accommodation, a garage or even a swimming pool.
- As the fall days get shorter, enjoy the changing trees, stay well and tune in to next week’s update from Realtor.com.
- Find trends in your market and download the data at realtor.com/research or follow us on Twitter for real-time updates.
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