Home prices dipped from June to July by .77% according to CNBC. Although home prices are only down slightly, it is the largest single month decline since January 2011. In addition, the drop marks the second worst July performance since 1991.
The fall is the first monthly drop in 3 years according to Black Night, which is a company that compiles data and analytics and also provides mortgage software to companies across the United States.
The only July decline steeper than 2022, was July of 2010, when prices dropped .9% during the Great Recession.
According to CNBC, housing affordability is at its lowest level in 30 years. It currently requires 32.7% of the median household income for a family to buy an average home with 20% down. The 25-year average is 23.5%.
With the significant price increases during the pandemic, joined by limited housing supply and skyrocketing interest rates, something has got to give.
It is difficult to identify a “trend” or predict future results with such a small sample of data. This could signal an opportunity for buyers who were previously eliminated from the market by higher rates, to re-engage and purchase a home.
As rents continue to rise at similar rates to price increases, the one way a consumer can make housing expense more predictable, is to buy a home with a 30-year fixed mortgage.
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