Due to the coronavirus pandemic and various confinements, governments increased the price of housing to the population everywhere. The aspiration to improve one’s own housing in the event of another possible home confinement drove the price up. In the United States, the number of manufactured home sales increased in the months following the height of the pandemic, with 6.7 million manufactured homes sold in a single month. But a slowdown in this variable and other indicators is starting to reveal a significant turnaround in the US real estate market that some are already calling a “recession.”
Thus, on the one hand, the number of houses sold in the month of July fell 5.9% 20.2% in respect of June and in respect of the corresponding period of the previous year. Thus, as reported by the National Association of Real Estate Agents of USA (NAR, for its abbreviation in English), it has gone up from 6.03 million homes sold in July 2021 to 4.81 million last month. Thus, the figure is back to pre-pandemic levels and Missed the 5 million mark for the first time in two years.
In the case of new homes, the decline has been even greater, with 511,000 homes in July, a level not so low since 2016. In fact, during the worst of the COVID-19 crisis, such property sales stood at 582,000.
Too, For the first time in nearly three years, the average selling price has decreased, According to specialized analysis firm Black Knight, the cost of paying for housing fell 0.77% in July compared to the previous month. Not only is this a ‘rare bird’ in the past three years, but this percentage represents the biggest monthly drop in prices since January 2011. July’s second worst month in three decades According to the NAR report, the median is now $403,800. However, it shows an increase of 10% as compared to a year ago.
“Further price corrections are likely on the horizon as we move into the more neutral seasonal months typical for the real estate market,” Andy Walden, Black Knight vice president of research and strategy, told CNBC.point of transition in the market”.
indicates everything interest rate hike The Federal Reserve, moving from 0 – 0.25% to a 2.25-2.5% range in just five months, has raised mortgages to levels that make it possible for American households to take home purchases seriously. The average 30-year mortgage interest is currently a little over 5%., although a few months back it had reached 5.8%. This high level has not been seen since 2008.
It comes Increase the percentage of total income that a family has to devote to paying off the mortgageWhich is already at a 30-year high. According to Black Knight data, households are forced to allocate 32.7% of their monthly income to meet the payment of a 30-year mortgage (if an entry was paid for 20% of the property’s value). was). This represents a 13 percentage point increase compared to before the pandemic.
meanwhile, inventory The construction of unsold homes rose to 1.31 million in July, a 4.8% increase from the previous month.
“We’re looking for a housing recession In case of decline in home sales and house construction. However, this is not a slump in home prices. Inventories remain tight and prices continue to rise nationally,” said Lawrence Yoon, NAR’s chief economist.
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