Buying activity is up, good news. China deal happened, which we know it would. Things are looking good. House Prices are pretty flat from last year.
The RE market is still stabilizing from the pandemic and post pandemic rate change. That threw the market completely awry and it takes awhile to figure out what we’re going to end up with. What we know for SURE, is that we don’t have enough houses.
That makes a “Crash” very unlikely. We also don’t have much distress in housing.
We have more inventory because houses are harder to buy due to affordability. It’s not more sellers than normal, it’s less home-buyers. We MUST increase wages for people to afford current house price. I don’t mean through min wage increase, I mean through job growth by creating demand for products and services.
Check out this chart often for wage numbers (notice pre-2020)
The number of owners with a mortgage over 6% has increased to 17%, the highest since 2016. But 80% of borrowers are below 5%. The big stat for you is that house payments are 115% higher than in 2020.
The monthly payment on a house is only $26 shy of the recent high. Buyers are applying for mortgages and searching for homes, but they are cautious. Sellers don’t want to sell to get a higher payment somewhere else.
Mortgage delinquency rates are 3.72%, less than the 4.5% pre-pandemic level.Foreclosure starts are 5.4% lower than pre-pandemic levels. Foreclosures are 34% less than pre-pandemic levels. This is because people don’t want to lose their low loan payments. Renting/buying somewhere would be hundreds of dollars more per month.
Nothing shows an imminent price crash unless the greater economy tanks. That is unlikely. The real problem is that people with median incomes can't afford a median-priced house. That is a significant problem that can only be fixed with wages catching up to price.
We need more houses. If the illegal immigration situation changes, that may affect housing. No one knows by how much.
Make your purchase and sale decisions based on the fact that the sales pace is increasing now.
I have some comments below on the tariff situation.
(Stats from from Altos, Housingwire, Jason Hartman, Joe Manausa, and others)
Source: tradingeconomics.com
Source: tradingeconomics.com
-Tarriffs are a big topic right now. I suggest this read. The goal is “reciprocal” tariffs with the countries that tariff us. There is no need to maintain the incredible trade deficit we have now. How does that serve America?
Renegotiating fair trade benefits American workers and industries. There is no obligation for America to keep funding other countries via trade imbalances, nor should we when we’re 36 Trillion in debt. I see guys like Erdmann saying tariffs are “dumb”, but it is difficult to understand his charting/logic when we feel the pain of imbalanced trade every day in the form of lower wages due to outsourcing products made by oppressed labor. Is that what America wants? Cheap products we can buy at any cost to others? I find myself buying the same things 3 times as often anyway from the poor quality. I’m not sure we’re “saving” any money buying china goods in many areas.
-The temporary Tariff effect will play out over a couple of months until the posturing stops, in our favor. I think we all understand that tariffs are not usually intended to be permanent, they simply bring countries back to the negotiation table for fair trade agreements.
Notice 3 Trillion in development by Honda and others have already moved into the US. Notice everyone is already playing ball except China. They export 5 times more to us than we export to them. Yes 5 to 1. So let’s see what happens. Does it mean Americans pay a little more for a “made in America” product? Yes, and it will last longer, and that company now making more revenue will pay workers more, and those workers will spend the money on other things, sales of those things go up. Etc.. That’s how it’s good. ALSO, there are tax cuts coming, and those cuts will offset the effect of not being able to buy junk from China.
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30-Year Mortgage Rate: 6.76% as of May 8th, 2025 (previously 6.76%)
MBA Mortgage Applications: 1.1% as of May 9th 2025 (previously 11%)
While serious delinquencies (SDQs) also improved seasonally, they are up 14% (+60K) YoY, with the rise driven entirely by FHA delinquencies, which increased by +63K YoY.
Higher SDQs, along with the lifting of a VA foreclosure moratorium, fueled a modest bump in foreclosure inventory and sales, which both rose annually for the first time in nearly two years.
Disaster events, such as hurricanes and wildfires, have led to YoY delinquency increases across several states, including Florida (+44 bps), South Carolina (+17 bps), Georgia (+14 bps) and California (+10 bps).
Monthly prepayment activity, measured by single-month mortality, jumped to 0.59% – a +30.4% increase over February and the highest level of prepayment activity since November.
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