Market Update 5/2/2023
Navigating the Real Estate Market: Key Economic and Regulatory Insights for Hungry Realtors
Hey there, Hungry Realtor Podcast listeners! In today's blog post, we're diving into the latest economic, housing, and regulatory news that shapes our ever-changing real estate market. Buckle up as we provide you with valuable insights to help you stay ahead of the curve in this competitive landscape.
Economic Update: A Mixed Bag
The U.S. economy is showing some mixed signals. The GDP growth slowed to an annualized pace of 1.1% in Q1 2023, mainly due to declining private inventory investment and nonresidential fixed investment deceleration. But on the bright side, consumer spending has increased by 3.7% despite a 4.2% inflation hike.
With the Personal Consumption Expenditure (PCE) price index also up by 4.2%, all eyes are on the Federal Reserve. Their upcoming meeting might announce a 25-basis point rate hike, affecting borrowing costs for potential homebuyers.
Housing Market: Turning a Corner?
Home prices saw a modest 0.2% increase in February, putting an end to a seven-month streak of declines. The reasons? Buyers competing for a limited number of homes, and mortgage rates coming down from their 20-year highs last fall.
New home sales are now surging – March saw a 9.6% rise, hitting the highest level in a year. Stagnant existing home inventory has nudged buyers to consider new homes instead, pushing the median sales price to $449,800.
Thankfully, lower interest rates, slowing price growth, and builder incentives are improving affordability expectations. In Q1 2023, only 73% of buyers couldn't afford half the homes in their market, down from a record high of 87% in Q4 2022. Those able to afford most homes doubled to 27%.
Regulatory News: Shake-ups and Clarifications
Regulatory changes are also impacting the industry. First Republic Bank was recently seized due to its unsustainable business model, following the collapse of Silicon Valley Bank in March. A Fed report found the latter's downfall resulted from internal mismanagement of risk and insufficient regulatory oversight.
Meanwhile, the Federal Housing Finance Agency (FHFA) is tweaking fees imposed by Fannie Mae and Freddie Mac to enhance mortgage availability for all Americans. According to a press release, recent targeted increases on some loans while eliminating upfront fees for others are all a part of the agency's mission to enhance mortgage availability for all Americans. You can see the updated fee schedule by clicking here.
Final Thoughts
The real estate market remains influenced by the complex interplay of economic, housing, and regulatory factors. By keeping up-to-date on these developments, you, our valued Hungry Realtor Podcast listeners, can better navigate this dynamic landscape and make well-informed decisions for your investments.
Stay up-to-date with the latest real estate market trends by following #HungryRealtor