Housing Data Surprisingly Strong Considering the Run in Interest Rates

It’s no surprise that real estate volumes are slowing down, and there are less buyers in the market. Recent housing data is showing that existing homes sales are down by almost 30%. What’s interesting is that some of the price appreciation numbers speak to the level of buyers vs sellers (the inventory problem): we are still aren’t overly-inventoried, which is making it very different from previous years.

Year Over Year Appreciation

Look at these numbers and you can see that looking back at July year-over-year appreciation, it shows that prices are up 13.7% compared to last year. So, we are still higher, which is pretty impressive.

We are seeing some drops in listing prices, but if we look back just one year, we are still high. Which means that we are still see seeing decent strength in the market. Sure, it’s slowing appreciation – no question. But it’s encouraging to see that we aren’t actually going backwards… yet.

Look at historical norms of appreciation, and you’ll find that we are in the range of about 5% per year. That’s comparing about 50 years’ worth of data; you will see a 5% number (roughly).

You can see on this chart going back to 2013, then we ran high and maxed out recently. Now, we are back down just a little bit. You can see how far above historical norms we still are.

Economist’s Predictions

I’ve been saying this a lot lately: I don’t know what is coming. But as long as inventory continues to stay in check with the number of buyers, we are going to continue to be in good shape.

Another noteworthy point: the head economist for National Association of Realtors said that he thinks we are going to max out in the 6% interest rate, which is a little higher than where we are right now. Then it will likely start to trickle down.

He’s also predicting that we are probably at the worst we are going to get. But who knows – sometimes economists are wrong. So, we’ll see how it turns out.

For now, there are a million naysayers – but the numbers show that things are hanging in there better than I would have expected.

Feel free to reach out to me if you would like a copy of this chart. Or contact me any time if you have questions about financing a home, I’m always here to help.