Despite the moderate rise in mortgage rates, homebuyers remain unfazed. A recent survey by Redfin showed only 5 percent said current homebuyers would stop looking for a new home if rates went above 5 percent market. Twenty-four percent said an increase would have no impact on their home search. Given today’s mortgage rates are still a quarter that of the historic highs (over 18 percent), we’ll take 5 percent all day.
Fact: median rent levels are on the rise, increasing 2.1 percent in the last year to $1,440 per month. No wonder some renters are becoming buyers. Renters put more of their income towards housing than homeowners, 32 percent versus 23 percent. Looks like owning might be more affordable than renting, and if you ask renters and homeowners, more renters believe housing in their area has become less affordable over the past few years whereas homeowners have a much more optimistic view.
Homes sold in June in an average of 54 days and the median listing rose 9 percent since June 2017 to $299K, setting a new record for sale speed and median home listing price across the country. Prices might be up but when also looking at income and other data, home prices are still quite below their 2006 peak—32.1 percent below. Household income has increased 23.7 percent over the same period, allowing consumers to have significantly higher house-buying power today than in 2007 when coupled with today’s still very low mortgage rates.