Pending Home Sales Down Again
Summary
"Pending contracts are telling, as they better reflect the timelier impact from higher mortgage rates than do closings," Lawrence Yun, NARs chief economist said. Yun noted that such price hikes are already a burden, but they become even more problematic to a family on a budget contending with rapid inflation, including surging fuel and food costs. First American Chief Economist Mark Fleming said Thursday that it’s not just the impact of declining affordability on demand that’s reducing the pace of sales in the housing market. There is limited incentive to sell if it will cost more each month to borrow the same amount of money.” Yun said that the vast majority of homeowners are enjoying huge wealth gains and are not under financial stress with their home as a result of having locked into historically low interest rates, or because they are not carrying a mortgage. "However – in this present market – potential homebuyers are challenged and thus may attempt to mitigate the rising cost of ownership by opting for a 5-year adjustable-rate mortgage or by widening their geographic search area to more affordable regions," he said, noting that work-from-home opportunities have made the latter option more viable.