Have homebuyers had enough? Nationally mortgage rates have spiked on top of record appreciation! Up 42% since the onset of the pandemic. Locally though the real estate market here in Santa Barbara has only seen modest changes so far. Homes may be taking a little longer to sell, and we’re seeing more price reductions/ price improvements. It seems as if the market reinvents itself every day.
Nationally mortgage purchase applications are down 18%. New home sales are down 17%, and single-family housing starts are down 16%. But it’s not quite a balanced market. Inventory levels remain a staggering 49% below July 2019 levels allowing sellers enough leverage to hold off on selling below market comparables from earlier this year.
Recently Redfin released its “risk score” which identifies the housing markets that are at the highest risk of a downturn. Redfin looked at 98 regional housing markets and assessed factors including home price volatility, average debt to income ratio, and home growth price growth. See the chart below.
Redfin: These Housing Markets at Most Risk of Falling Home Prices
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