By Michael White
We have talked about the importance of following the data and knowing the facts. We have addressed how those in the mainstream media, social media “gurus”, and those just trying to generate clicks to support their revenue streams, all like to post big scary headlines without much regard for looking at the truth and the facts before they try and spin their fiction.
Housing bubble, foreclosure wave, higher rates stopping purchases, first time buyers can’t afford houses, blah, blah, blah! It never seems to stop.
Yes, home resales are off about 18% year over year. Fact, the resale volume is right about the same level of home resales prior to the pandemic. In other words, NORMAL!
Foreclosures and short sales are less than 1% of all transactions. So, what happened to the wave of foreclosures that were going to happen due to forbearance? I’ll tell you what happened, they paid the arrears due, renegotiated their loans successfully and are making their payments, or they sold their houses, pocketed their cash, and moved on! And as far as higher rates stopping first time buyers; well, they must not have been paying attention because they still represent 30% of all transactions
For all those Realtors® who said they couldn’t sell houses because of inventory; well, you need to take a quick look, inventory is UP more than 2% year over year and houses are being sold at record speed, with average days on market falling to just 14 days! Doesn’t sound like a bubble to me!
Markets remain volatile so keep thinking about locking in the PAYMENT if your borrower is at risk if rates move higher. Federal Reserve meeting next week and it could be a market mover. I am hoping for 100bps hike but expect they will tippy-toe higher by raising only 75bps. We would all do better if we just got it over with more quickly; but this FED isn’t noted for speed, conviction, or clear vision so I will be grateful they still aren’t going to 50bps us forever.