As refinance activity slows to a halt in mid-July, mortgage lenders are closing their doors and waiting for a resurgence of homebuying in a less volatile market. Mortgage rates are climbing ever-higher, inflation is hitting new highs, and housing supply is still historically low, but increasing inventory could be a saving grace for the housing market if new homes currently under construction are completed in the near future, says Bill McBride in the CalculatedRisk Newsletter.
House price growth is still strong nationwide, but 5 months of homes are currently under construction across the U.S. While home sales are expected to slow over the coming months, increased inventory and price drops on for-sale listings could offer some relief for buyers still actively searching for homes.
We are seeing a clear slowing in the housing market, with more price reductions, more inventory, and fewer sales. It will take some time to see the impact on house price growth, but that is coming too.
Next week, existing home sales will likely show a sharp year-over-year decline in sales for June, and housing starts will probably show further declines (and still a record number of homes under construction).
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