Let’s cut to the chase – the housing market is not looking pretty.
Refinance volume has all but vanished (86% lower than the same week a year ago), mortgage applications are down 41%, and, according to the latest data from the National Association of Realtors (NAR), pending home sales have dropped by 37% year on year.
The downturn in the sector has largely been blamed on soaring interest rates, which have more than doubled since the start of the year and recently hit 7.08% for 30-year fixes – the highest level since 2006.
And although rates have fallen to 6.49% this week, most experts believe recovery is a long way away. In fact, Jim Egan, Morgan Stanley’s housing strategist, went on CNBC news this week to say that housing activity is “poised to get worse in the year ahead”, noting that house sales have fallen to their lowest level since 2013.
But while the market has shrunk, there are some experts like mortgage veteran Brian McCauley (pictured), who insist the downturn is localized and that there is still much business to be had.
“The housing market in general has experienced a correction because of the recession and inflation, (but) that is really specific to where you live. States like Florida and Texas are doing really well, so they’re able to absorb these corrections much better than cities and states that aren’t,” said McCauley, who is a North Texas-based LO at Fairway independent Mortgage.
