Interesting indicators, owner increase & “bubble, schmubble”

HEALTHY HOUSING

The National Association of Realtors (NAR) predicts that the number of home sales will increase next year, but the rate of price appreciation will slow. Speaking at the 2018 Realtors® Conference & Expo, NAR Chief Economist Lawrence Yun rejected speculation about another housing bubble, saying “…people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.”

INTERPRETING INTEREST

Mortgage interest rates receded slightly in the week ending November 1 according to Freddie Mac’s Primary Mortgage Market Survey. Even though the 30-year fixed rate mortgage has been rising all year, the government-sponsored entity says, “…the chronic lack of entry-level supply is a larger hurdle than higher mortgage rates because choices are limited and the inventory shortage has caused home prices to rise well above fundamentals.”

SEPTEMBER SLUMP

September new home sales were down 13.2% year-over-year, following downward revisions for sales in June, July and August. Economist Elliot Eisenberg, PhD says it’s not necessarily a sinister stat, noting that “…housing sales need to consistently fall about 20% Y-o-Y before a recession follows.”

OWNER UPTICK

Homeownership is up according to the Census Bureau. The U.S. homeownership rate reached 64.4% in the third quarter, up from 64.3% in Q2 and 63.9% year-over-year.

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