Housing market shows signs of cracking. Here’s why from CNBC.
- Even in the hottest markets, there is an affordability limit, and that limit is clearly now being hit.
- “We’re still selling most every home, but now it is usually with just one or two offers over the 10 to 15 offers we were seeing earlier in the year,” said David Fogg, a real estate agent based in Burbank, California.
- Homeownership is, however, gaining for younger households, especially those under 35. In the second quarter of this year, their homeownership rate hit the highest level in five years, according to the U.S. Census.
The latest numbers in housing aren’t pretty at all.
Sales of both existing and newly built homes fell in June, the latter to the lowest level since last year. Prices continue to rise, but the gains are slowing. Mortgage applications to purchase both new and existing homes have been falling steadily, and mortgage rates are rising again. Single-family home construction also fell and was lower than June 2017.
In one of the nation’s hottest metropolitan markets, Denver, Colorado, home sales fell 5.5 percent annually in June, even as prices hit an all-time high, according to a report by RE/MAX. Realtors there blame it squarely on a lack of homes for sale.
“Year-over-year prices have been climbing for more than two years now, which is great news for homeowners and sellers,” said RE/MAX CEO Adam Contos. “The slower sales figures we’re seeing are tied to inventory more than anything else.”
Record Drop in Foreigners Buying U.S. Homes
Foreign purchases of U.S. homes had their biggest drop ever, bringing relief to waves of American house hunters who have struggled to compete in affluent neighborhoods with wealthy buyers from abroad.
Purchases by international buyers totaled $121 billion in the fiscal year ended in March, down from $153 billion the previous year, according to a survey by the National Association of Realtors released Thursday. That 21% decline was the largest on record, the NAR said.