BOISE, Idaho — We all expected the housing market to heat back up this spring, but much like the weather the past couple months, it still feels like winter. But unlike the weather the past couple months, a colder housing market is welcome news to a lot of folks hoping for prices to come way down.
We are just underway in the spring selling season, but let's look at the March numbers:
March '23 vs. March '22
- Up 260% - Days on market
- Down 9.3% - Homes sold
- Down 16% - Median price
- Up 220% - Days on market
- Down 17.9% - Homes sold
- Down 12.8% - Median price
Last year at this time, homes were already flying off the market. But as you can see, right now, homes are staying on the market well over 200% longer in both Ada and Canyon counties.
That means they are on the market for more than two months on average, rather than less than a month like last year. That translates to fewer homes being sold, almost 18% fewer in Canyon County. We are also seeing lower median prices, 16% lower in Ada County.
If people were waiting for prices to go down – and they are – why aren't more people buying? Lots of folks are also hoping for interest rates to plummet, and they are not.
Freddie Mac Primary Mortgage Market Survey:
As of April 20, 2023
- 6.39% - 30Y FRM
- 5.76% - 15Y FRM
One year ago
- 5.11% - 30Y FRM
- 4.38% - 15Y FRM
If you look at these latest numbers from Freddie Mac, they are doing the opposite of plummeting – they are rising. The average 30-year fixed rate mortgage is up 0.12 from just from the previous week. It's up 1.28 from last year. The average 15-year mortgage rate is up even more.
All this cancels out, and then some, the drop in home prices. That means your overall mortgage costs are still up, even though home prices are falling. So, when might rates fall? No experts see that happening any time soon.
Let's talk about inflation. Inflation overall is slowing down. That means the price for everything is not necessarily coming down. It's just that the growth of prices for everything – like groceries – is leveling off to a more steady climb. But they are still climbing.
Bharat Ramamurti from the National Economic Council said, "jobs are going up, wages are going up, inflation is coming down."
However, prices are still way too high, with housing being the biggest offender. While inflation is slowing down, it's still not where the feds want it. So, analysts expect the feds to try to lower inflation even more with, not a rate cut, but at least one more rate hike in the next few weeks. That, of course, increases your total mortgage costs and again, negates the downtick in home prices we've seen.
Sorry about that.
The positive here are the jobs. All the jobs here in this area and around the nation are a big reason the economy continues to chug along, and prices are still high. People who are employed can generally afford stuff. But right now, that “stuff” does not include a lot of homes in our area.
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