{"id":1491977,"date":"2022-05-25T15:59:39","date_gmt":"2022-05-25T19:59:39","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1491977"},"modified":"2022-05-25T15:59:43","modified_gmt":"2022-05-25T19:59:43","slug":"the-housing-market-reaches-an-affordability-turning-point","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-housing-market-reaches-an-affordability-turning-point\/","title":{"rendered":"The Housing Market Reaches An \u2018Affordability Turning Point\u2019"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fthe-housing-market-reaches-an-affordability-turning-point%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1491977&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The housing boom witnessed over the past two years may finally be drawing to a close, as indicated by mortgage and sales data.<\/p>\n<p>Since the beginning of 2022, 30-year fixed mortgage rates have <a href=\"https:\/\/fred.stlouisfed.org\/series\/MORTGAGE30US\">surged<\/a> from slightly over 3% to well above 5% \u2014 causing a <a href=\"https:\/\/www.cnbc.com\/2022\/05\/25\/mortgage-demand-slides-further-even-as-interest-rates-pull-back-slightly.html\">slump in demand<\/a> for new purchase loans and refinancing services. A Tuesday report from the U.S. Census Bureau <a href=\"https:\/\/www.census.gov\/construction\/nrs\/pdf\/newressales.pdf\">confirmed<\/a> that sales of new single-family homes in April fell to 591,000 \u2014 falling far short of the 750,000 <a href=\"https:\/\/www.cnbc.com\/2022\/05\/24\/sales-of-newly-built-homes-fall-16percent-in-april-as-prices-soar.html\">expected<\/a> by analysts, as well as 16.6% below home sales in March.<\/p>\n<p>Although sale activity has slumped to its lowest level since the onset of COVID-19 and the lockdown-induced recession, the median sale price in April was $450,600 \u2014 nearly 20% above prices at the same time last year.<\/p>\n<p>David Bahnsen, the founder of Manhattan-based wealth management firm The Bahnsen Group, told The Daily Wire that there is \u201cno ambiguity\u201d around the reason for the drop in home sales.<\/p>\n<p>\u201cIt is affordability,\u201d Bahnsen explained. \u201cRising rates on top of bubble-level prices have made housing less affordable, and now that has caught up with transaction activity.\u201d<\/p>\n<p>Indeed, the residential real estate market is becoming less friendly to households amid both phenomena. \u201cAs Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation,\u201d government-backed mortgage company <a href=\"https:\/\/www.freddiemac.com\/pmms\">Freddie Mac<\/a> said last month.<\/p>\n<p>Bahnsen observed that higher rates and soaring prices have reached an \u201caffordability turning point.\u201d<\/p>\n<p>\u201cMy expectation remains that it will not become evident in prices just yet \u2014 as rather than transact at lower prices sellers simply don\u2019t sell for a time \u2014 but then later in the year, we begin to see price levels decline as well, with those declines accelerating in 2023,\u201d Bahnsen forecasted.<\/p>\n<p>The sharp increase in mortgage rates is largely due to actions from the Federal Reserve to taper its quantitative easing regime. In a preliminary effort to curb inflation, the Fed <a href=\"https:\/\/www.dailywire.com\/news\/the-fed-jacks-key-rate-up-half-point-as-inflation-surges\">increased interest rates<\/a> by a half point earlier this month \u2014 which marked the largest rate hike since May 2000 and followed a quarter point increase from the near-zero levels that have prevailed since early 2020.<\/p>\n<p>Heritage Foundation research fellow Joel Griffith told The Daily Wire that moving forward, buyers can expect a wider selection of homes and increased buying power \u2014 even as mortgage payments remain high.<\/p>\n<p>\u201cA $1,600 mortgage payment could finance a $400,000 purchase one year ago \u2014 but only a $300,000 purchase today,\u201d Griffith commented. \u201cSellers can anticipate buyers far more eager to haggle lower on price and longer sales time. And many sellers may be unpleasantly surprised to see their mortgage payments on their next home substantially higher \u2014 even if their mortgage balance is smaller.\u201d<\/p>\n<p>More broadly, there are mismatches between supply and demand that continue to plague the housing market. Construction of new long-term housing has <a href=\"https:\/\/www.housingwire.com\/articles\/us-housing-market-is-short-5-5-million-homes-nar-says\/\">already been slowing<\/a> over the past several decades \u2014 resulting in 6 million too few homes on the market.<\/p>\n<p>As The Daily Wire\u2019s Cabot Phillips explained on a recent episode of \u201c<a href=\"https:\/\/www.dailywire.com\/podcasts\/morning-wire\">Morning Wire<\/a>,\u201d some experts believe that \u201cuntil the supply of houses meets the overwhelming demand that we\u2019re seeing right now, prices will continue to rise.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The housing boom witnessed over the past two years may finally be drawing to a close, as indicated by mortgage and sales data. Since the beginning of 2022, 30-year fixed mortgage rates have surged from slightly over 3% to well above 5% \u2014 causing a slump in demand for new purchase loans and refinancing services. &#8230;<\/p>\n","protected":false},"author":99,"featured_media":1492026,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1491977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1491977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1491977"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1491977\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1492026"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1491977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1491977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1491977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}