The most important thing to know is the national supply (inventory) of houses for sale remains stable, and sales volume is RISING. Mortgage Interest Rates are stables so volume of sales starting in January is great. Prices ended 2023 mostly flat, about 3% increase from 2022.

“Imminent crash” is clickbait. (or ignorance) While anything CAN happen, the odds are MUCH higher that prices continue seasonally upward, especially in starter homes. (The exception is a total monetary failure of our currency).

(from our friends at Altos, hartman, manussa, and others)

• Last week’s SFH Inventory on Market: 490,000 (altos)
• This week’s SFH Inventory on Market: 556,000 (32% higher than last yr)
• Last Week’s SFH Median Home Price: $415,000
• This Week’s SFH Median Home Price: $418,000
• Sale Volume is 4.25% HIGHER last week than same wk last year.
• This Week’s price reductions are 32%, normal is 30-35%.(this data point is a leading indicator of buyer demand strength)
• Last Week’s Median Price of New Listings: $355,000 (leading indicator price direction)
• This Week’s Median Price of New Listings: $409,000
• Vacancy Rate: 4% – near record low

(All Residential Rental Property Units Available for an Individual to Occupy, excluded are seasonal properties, occasional use, second
homes and vacation homes.)

Because the current market relies HEAVILY on the CHANGE in mortgage rates, we’ve added this section. Mortgage applications in the US surged by 9.9% on the first week of the year, the most in one year and rebounding sharply from the 10.7% slump from the previous period. The results aligned with expectations that the Federal Reserve is due to commence its rate-cutting cycle in the first quarter, lowering benchmark borrowing costs and making mortgages more accessible to US home buyers. Consequently, average mortgage rates were at 6.81%, slightly above the 6.76% from the earlier week but firmly below the 23-year high of nearly 8% from October. Applications to refinance a home jumped by 19% from the previous week, outpacing the 6% jump in applications to purchase a home.

Source:
Mortgage Bankers Association of America https://tradingeconomics.com/ united-states/mortgage-applications

• The national delinquency rate edged higher to 3.39% in November – down 10 basis points (bps) from the same time last year – but remains 64 bps below pre-pandemic levels
• Likewise, early-stage delinquencies among VA loans hit their highest non-pandemic levels since 2009, as rising interest rates have begun to impact performance among recently originated loans
• Serious delinquencies (90+ days past due) rose to 459K, but remain down 123K (-21%) from November 2022
• Foreclosure starts decreased -12.2% in November to 29K with active foreclosure inventory falling to 216K, some 23% and 24% below 2019 levels respectively
• Prepayment activity fell again under continued pressure from seasonal homebuying patterns along with the residual effects of 30-year rates climbing above 7.75% the month prior.

https://www.blackknightinc.com/data-reports/first-look-november-2023-mortgage-data/

Additional insights

https://www.corelogic.com/intelligence/loan-performance-insights-november-2023/

• *** Housing Stock Growth Rate is 0.8% since 2009 – HALF of of the average the previous 30 years. Total Housing Stock growth is NOT keeping pace with demand. This is also keeping the market in very low inventory compared to previous years. This is why the “crash” word is hard to give credence to right now.
• “For sale” inventory goes up every Spring, but so does the number of sales.
• Home sales volume is 247,000 in contract last week, 4.25% MORE than same week last yr. As mentioned, the pendings are up 13%. All good signs.
• If you aren’t getting showings you are probably at the wrong price. If showings aren’t producing offers, the house itself may have a problem such as insufficient level of repair.
• Prices BELOW MEDIAN for any local area are holding best, we always buy at or below median prices because it means the biggest buyer pool.
• Real estate remains one of the best hedges to gain from an inflationary period. Buying it at a discount, in local areas of increasing appreciation makes it an incredible ROI.
• Rent prices may soften in some transient areas as homeowners who need to move and buy in another city for job/marriage, etc.. will decide the 3 – 4.5% mortgage is too good to give up and they rent the home instead of selling it.

Issues affecting RE availability and price:

AirBnb is taking a hit as I said it would. When inflation eats away everyone’s disposable income, vacation rents come down.

— As for supply and demand

There is nothing to indicate a new-construction over supply, and so far a modest increase in foreclosure activity. WE REMAIN VASTLY UNDERSUPPLIED FOR HOUSES. Until rates come down, which is unlikely, more people than every can’t afford to buy because their wage isn’t high enough for today’s rate, and they’re getting moved down into part0time jobs, making it worse.

— Foreclosure activity

• There were a total of 124,539 properties with foreclosure filings during Q3 2023, up 28% from the previous quarter and up 34% from a year ago….to give you context, it was 900k houses in Q1 2010. We’re still in record low foreclosure territory.Lender STARTED 68,000 foreclosures in Q3 2023, DOWN 1% from previous quarter.
• THE HOUSES WE NEED MORE OF ARE TOO CHEAP TO BUILD. Builders can’t profit on those, so they aren’t building the affordable houses the market needs, only higher-end houses. That means the “median price and below” price range will continue to be in high demand with rising prices. Buy in that price range. (Our rental model is perfect for this by the way)
• The Fed has no choice but to keep inflating the fiat money, otherwise the financial system fails.

Policy Watch: (same as last week)

• There is an Nation Association of Realtors class action suit filed. More to come on that as it plays out.
• There is a lot of talk about the US Dollar status in jeopardy as the reserve currency right now due the expansion of the BRICS economic coalition. It’s really tough to speculate what will happen. It is evident the US is still the strongest, most stable economy by a longshot. We’re going to see what happens in the new Middle East War.
• Please be AGAINST a Central Bank Digital Currency (CBDC) by telling your Federal and State lawmakers you will not accept it. It will be offered as a convenience, then cash will be demonized, then CBDC mandated unless the pushback starts now. It will allow 100% control of opinions or your money gets turned off. The Blackrock CEO said this, not me.

(But Still Rely Most On HousingAlerts For Local Metrics).

Altos Feb 27, 2024 Update.