There is so much to be aware of in global mobility. Teams have to be knowledgeable on a huge variety of topics, while also managing stakeholder and relocating employee expectations. In a previous post ("Elevating mobility"), I touched on some advice for global mobility leaders who want to reach a new level of individual, team and program performance. But after re-reading it, one of the items not included in that advice was to "embrace learning and knowledge". Adding to your understanding of critical topics is essential to being considered and seen as an "expert".
We're committed to keeping you up to date with our Trending Topics page. Recently, we've hit a wide variety of subjects from new potential policies, to compliancy awareness, to the ongoing impact of Covid-19 on programs. Today, we're talking about housing! Given the importance of home purchase and rental opportunities in relocation, we want to dive into the U.S. real estate market. This article from Vox, "The housing market slowdown, explained in 7 charts", explains how it is becoming harder for buyers and renters to afford housing due to increased mortgage rates and unbelievably high prices.
So check out these 10 take-aways to help you understand the current housing market:
- Interest rates on 30-year home loans surpassed 6% recently for the first time since 2008, squashing much of the demand for new loans.
- Many industry experts expect mortgage rates to rise further as they anticipate an equal or larger hike in September by the Federal Reserve.
- Home construction is slowing down.
- New property listings have started to decline.
- Single-family home sales are falling fast. Sales of new single-family and existing homes have plummeted, signaling reduced demand as high mortgage rates and home prices push potential buyers out of the market.
- The amount of time that listings are sitting on the market has also increased as competition for properties has diminished.
- Buyers are starting to have negotiating power for the first time after several years of a seller's market.
- The few homes that are being sold are still selling at high prices. Although prices are starting to come down now, they still remain much higher than they were a year ago.
- Rent keeps getting more expensive. Rent prices also jumped during the pandemic, although the pace of growth has started to ease. Average monthly rent was $2,031 nationally in July, up 0.6 percent from June and 13.7 percent from a year ago, according to Zillow data.
- Housing is becoming even less affordable overall.
Another great resource to utilize for exploring property data and getting real estate insights is CoreLogic. They share that home prices nationwide, including distressed sales, increased year over year by 15.8% in July. This makes July 2022 the 126th consecutive month of year-over-year increases. This chart shows the top 10 metro areas where prices keep rising - Miami tops the list with a 27.1% year over year jump.
However, there are a number of locations where prices will may start to drop, outlined below:
As you can see, that old saying about there being three things that matter in property, "location, location, location" seems to remain true!
After mortgage rates hit record lows during the pandemic, driving up demand for new homes and pushing up listing prices, the housing market is now slowing down. That’s good news for buyers who can afford to stay in the market. But many prospective buyers are being priced out as high mortgage rates and steep prices make it unaffordable for some to purchase a new home. At the same time, new home construction has decreased as builders become warier of falling demand — and rent prices have continued to increase.