Today, in the Calculated Risk Real Estate Newsletter: The impact of 7% Mortgage Rates
A brief excerpt: The following table is from the Freddie Mac’s primary mortgage market survey (PMMS)..
Existing home sales bottomed in December 2022 and January 2023 on a seasonally adjusted annual rate (SAAR) basis. Those closed sales were for contracts signed mostly in the October through December timeframe when rates were the highest.
The recent surge in rates started in June, and if there is an impact on sales from higher mortgage rates, it will likely impact closed sales in the August through October timeframe. We will know about July sales very soon as local market data is released.
There will likely be less of an impact on new home sales since homebuilders will offer various incentives and mortgage rate buydowns (3-2-1 is fairly common – with the homebuilder buying the rate down by 3 percentage points in year 1, 2 percentage points in year 2, and 1 percentage point in year 3).There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/