Newsletter for Week of June 6th, 2023

Hello, Future Homebuyers!

Welcome to the latest weekly newsletter from Homefinity—the first for June of 2023!

With warm weather finally thawing out in the northern states and sunny skies shining in the southern ones, we take a gander at the latest mortgage and real estate news that is making waves.

So grab your real estate surfboard, and let’s hang ten.

Latest U.S. Mortgage Rates 2023-06-01

• 30-year fixed: 6.8% (previous week: 6.57%)
• 15-year fixed: 6.18% (previous week: 5.97%)
• 30-year FHA index: 6.651% (previous week: 6.594%)
• 30-year fixed rate Jumbo: 6.947% (previous week: 6.883%)

Stay informed with Homefinity about rate fluctuations that could impact your loan decision.

Austin’s housing market decline triggers real estate concerns

The housing market in Austin, Texas, has become a focal point for growing apprehension as home prices have plummeted more rapidly than in any other U.S. city, including the troubled San Francisco market.

Data from the Zillow Home Value Index reveals that between July 2022 and April 2023, Austin’s home prices plunged by over 10 percent, while nationally, they only dipped by around 1 percent. 

The largest decline across the country was in Austin, followed by San Francisco with a 10 percent drop, Bend, Oregon, with a 9.5 percent fall, and Boise with a 9.3 percent decrease.

Housing market analysts had anticipated this situation in Austin last summer, saying that the recent years of soaring prices would eventually be succeeded by a price correction.

This adjustment, which has caused home prices to decline nationwide at varying rates over the past few months, is viewed by experts as a direct result of homes becoming increasingly unaffordable due to bidding wars and low inventory, particularly as mortgage rates have suddenly spiked.

Experts maintain that the current correction bears no resemblance to the 2008 housing market crash, asserting that both mortgage borrowers and lenders are in a much stronger position now compared to 15 years ago.

Reuters: Global housing outlook improves despite rising rates

The majority of major housing markets have experienced a slight improvement in outlook compared to three months ago, despite increasing interest rates. 

According to Reuters polls of property analysts, opinions were divided on whether affordability would deteriorate or remain stable.

During the COVID pandemic, house prices in developed countries soared, with some cases reporting over 50% increases. However, modest declines have been observed over the past year as central banks raised interest rates.

Despite higher borrowing costs, the housing market has remained resilient due to low unemployment rates and a surge in post-pandemic immigration, which has maintained strong demand amid limited supply.

Reuters polls conducted from May 15 to June 5, which included around 100 analysts, indicated that house prices in the U.S., Canada, Germany, Australia, and New Zealand either stagnated or fell less than anticipated three months prior. The outlook for Britain and India, where prices continue to rise, remained largely unchanged.

Among the analysts who responded to an additional question, opinions were almost evenly split on purchasing affordability for first-time buyers; 45 believed it would worsen, while 43 thought it would improve.