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‘We See Buyers Retreat’: This Dramatic Chart Reveals a Shift in the Housing Market as Sellers Lower Home Prices

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Here’s a chart that speaks a thousand words about the state of the real estate market right now.

The chart above, part of a new report By Redfin Real Estate Broker
RDFN,
-7.03%

In the real estate market, he reveals how home sellers are adjusting to the new normal of 7% mortgage rates.

The chart shows that 7.9% of homes for sale on the market each week have fallen in price – a record.

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That’s compared to just 4% of homes dropping in price each week compared to the same period last year.

Redfin’s data goes back to 2015. The company averaged the share of listings that saw a price drop over a four-week period, to smooth out any outliers.

Taylor Marr, Deputy Chief Economist at Redfin, added that looking at a larger period of time, a month, the company’s data shows that a quarter of homes are currently falling in price.

“We’ve never been to this level before,” Marr said in an interview with MarketWatch.

Unlike buyers, who are more sensitive to rising mortgage rates, “sellers are slow to respond to changes in demand… they set prices based on where they think the market is. [and] They are often reluctant to set prices too low,” Marr said.

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For sellers, he added, prices are more stable and slower to fall.

But even if it takes a while, it finally happens.

After all, mortgage rates are at multi-decade highs, with a 30-year trend steadily above 7% as of Friday afternoon, according to the Daily Mortgage News. This is likely to rise further, as stated in the 10-year Treasury note
TMUBMUSD10Y,
4.023%
And the
Trending above 4%.

Meanwhile, Redfin said the average home on the market was listed at more than $367,000, up 7% from last year.

Monthly mortgage for that home at the current interest rate of 6.92%, according to Freddy Macis $2,559.

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A year ago, when rates were at 3.05%, that monthly payment would have been just $1,698.

Two Tips for Home Buyers Suffering from High Mortgage Rates

Marr said sellers are reducing their prices by 4 to 5% on average.

“You would almost expect it to be a lot worse,” he added, given how quickly interest rates are rising and purchasing power is eroded.

But Marr said buyers and sellers are also using two different tactics to get some relief from mortgage rates.

First, sellers communicate with buyers and make concessions to purchase low mortgage rates.

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In other words, sellers ask buyers to pay the full asking price, but suggest using a portion of that as a concession to get buyers a lower interest rate on their mortgage.

“And it’s basically a drop in prices, it’s the same thing…but it doesn’t necessarily show up in the data,” Marr said. He added that it is difficult to know the extent of how this happened.

Marr explains how it works like this: If a buyer puts $100,000 on their home with 20% down payment at a 6.5% interest rate, they can instead set aside 10% for the down payment, spending the remaining $50,000 on the purchase. Lower the mortgage rate to 5%.

“5% isn’t too bad, and it might seem like a lot of money, but… chances are that you will be incentivized to refinance [in the future] And you will have to pay the closing cost on this loan to refinance, which could be over $15,000.”

Buyers are also turning to adjustable rate mortgages, which offer lower interest rates at the beginning of the term. ARMs are Approximately 12% of all mortgage applications, On Wednesday, the Mortgage Bankers Association indicated a significant increase.

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Where prices go down

In terms of places for lower prices, two places that stood out for Redfin.

They said home prices fell 3% year over year in Oakland, California, and 2% in San Francisco. New Orleans also saw a 2% drop.

“Even in Atlanta, or Orlando, we see buyers pull back,” Marr noted.

So with the backdrop of sellers’ prices finally dropping, if you’re a buyer right now, don’t worry about prices going up and stop looking, he advised.

“There were opportunities when prices really went down and it gave buyers a chance to jump back in and get some good deals on homes that really drove their prices down,” he said.

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Plus, “it doesn’t hurt to make a low-ball show,” Marr added. “Some sellers are desperate, and that could be a good strategy… We’ve heard from some of our agents that some buyers are getting incredible deals right now.”

But if you need to rent for a year and wait for things to calm down, do so, said Marr, and accumulate that savings for that dream house.

Do you have ideas about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at aarthi@marketwatch.com

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Stocks fluctuate as investors ponder the course of prices

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Next week’s Federal Reserve decision and inflation figures may provide more clarity on interest rates

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Oil prices are falling as US oil supplies fell for the fourth straight week, but product inventories rose sharply

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Oil prices fell on Wednesday, giving up modest early gains, despite US government data showing domestic supplies of crude oil fell by more than 5 million barrels last week, declining for the fourth consecutive week, although gasoline and distillate inventories rose. sharp. .

Fears that more rate hikes by the Federal Reserve could cause markets to stagnate in recent days have sent oil prices down for three consecutive sessions, despite concerns about the impact of a G7 price cap on Russian oil that was imposed. Monday. .

price action
  • WTI January delivery
    CL00,
    -1.89%

    cl.1,
    -1.89%

    CLF23,
    -1.89%

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    It fell 25 cents, or 0.3%, to trade at $74 a barrel on the New York Mercantile Exchange. On Tuesday, it was the final low for the next month’s contract since Dec. 23, 2021, according to market data from Dow Jones.

  • Brent February
    BRN00,
    -1.55%

    BRNG23,
    -1.55%
    And the
    The global index lost 15 cents, or 0.2%, to $79.20 a barrel on the ICE Futures Europe platform. Tuesday closed at its lowest level since January 3.

  • Back to Nymex, January gasoline
    RBF23,
    -2.30%

    And it fell 0.8 percent to $ 2.1329 a gallon, while heating oil for the month of January
    HOF23,
    -3.74%

    It traded at $2.8732 a gallon, down 1.5%.

  • Natural gas for the month of January was trading at $5,522 per million British thermal units, up 1%.

display data

On Wednesday, the Energy Information Administration reported a fourth consecutive weekly decline in US crude inventories, but both gasoline and distillate inventories rose.

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“If crude stocks continue to decline, they are likely to challenge the general downtrend that has been identified [oil] “Last month’s prices,” said Robbie Fraser, director of global research and analytics at Schneider Electric.

Domestic commercial crude stocks The Energy Information Administration said that a decline of 5.2 million barrels in the week ending in the second of December.

On average, analysts had expected a drop of 2.6 million barrels, according to a survey by S&P Global Commodity Insights. The American Petroleum Institute, a trade group, reported late Tuesday that crude supplies fell by 6.4 million barrels last week, Dow Jones reported, citing a source.

“Continued strength in refining activity and exports has encouraged another pull” for crude supplies, said Matt Smith, principal oil analyst for the Americas at Kpler, in response to the supply data.

With US Strategic Petroleum Reserve transfers slowing, US commercial inventories have declined year-to-date and are “set to decline further in the coming weeks,” he said.

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Still, the EIA showed weekly inventory gains of 5.3 million barrels of gasoline and 6.2 million barrels of distillate. The S&P Global Commodity Insights survey called for an increase of 2.9 million barrels for gasoline and 1.9 million barrels for distillates.

The Energy Information Administration said crude inventories at Cushing, Oklahoma, the delivery hub for Nymex, fell by 400,000 barrels over the course of the week, while inventories in the Strategic Petroleum Reserve fell by 2.1 million barrels.

other market drivers

China has announced measures to roll back some coronavirus restrictions. Among them is reducing harsh lockdowns and ordering schools with no known infections to resume normal classes, the Associated Press reported Wednesday.

“Traders have been looking for more positive news when it comes to China’s zero-tolerance COVID policies,” Naeem Aslam, senior market analyst at AvaTrade, said in a market update.

And now “we’ve heard from those responsible for further easing of these measures,” providing a boost to investor sentiment in Asia — and potentially “spreading that sentiment” to Europe and the US given that China is the world’s second-largest economy, he said.

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But Stephen Innes, managing partner at SPI Asset Management, warned that a “COVID tsunami in China is coming as the most populous country is forced off a COVID-free slope”, after backing a “very early way to reopen China” some markets. “It will be a tale of two haves in China, as winter oil prices and coronavirus mobility woes give way to hope for an eternal spring in the second quarter.”

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Prince suspected of plotting to be German Kaiser in coup by Reuters

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© Reuters. Prince Heinrich XIII PR inside a police car in this screen from Reuters Television, after 25 suspected members and supporters of an far-right group were arrested during raids across Germany, in Frankfurt, Germany December 7, 2022. Tillmann Blashofer

Written by Sarah Marsh

BERLIN (Reuters) – Prince Heinrich XIII, Prince Reuss, is one of the last lines of a dynasty that once ruled vast swathes of East Germany. He is suspected of hoping to become the country’s new leader in a violent coup to overthrow the democratic system.

Authorities said the 71-year-old was one of 25 members and supporters of a far-right group planning the alleged coup who were arrested early Wednesday in nationwide raids.

The real estate developer has long publicly advocated that life in theory was better around the world under the monarchy. He was descended from the Reuss family, which for centuries ruled parts of present-day Thuringia until the German Revolution of 1918 that led to the creation of the Weimar Republic.

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Neither the Royce family nor Prince Royce’s office responded to requests for comment.

In a 2019 speech to the World Wide Web Forum – which describes itself as bringing together progressive minds to enable positive radical change – he said people in the Principality of Ruwais were living a “happy life” because the tax rate was only 10% and the structures were “straightforward and transparent”.

“If things don’t go well, I just went to the prince,” said Heinrich. “Who are you supposed to turn to today? Your parliamentarians, at local, federal or EU level? Good luck!”

In his speech, peppered with anti-Semitic intrigue, he said that Germany had been a vassal government since World War II and needed to restore its sovereignty through a peace agreement.

He said that monarchies around the world including France were overthrown due to the interference of foreign powers who wanted to set up corporate structures in pursuit of profit. He said that people suffered as a result.

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Holy Roman Emperor

Prosecutors said on Wednesday that Heinrich reached out to representatives from Russia, who the group saw as the central contact for establishing its new regime. They said there was no evidence that the representatives responded positively to the request. The Kremlin said there was no doubt about Russian involvement in the alleged plot.

Heinrich was arrested at his home in Frankfurt, led by masked policemen in handcuffs, mustard-coloured corduroy pants and a tartan-patterned jacket, with long gray hair.

Police also searched his hunting lodge in Thuringia where they suspected he was storing weapons, according to Ostthueringer. The country in eastern Germany is known for the strength of the far right there.

The Federal Prosecutor’s Office declined to comment on the report, saying only that there had been a raid in that area.

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It also declined to comment on how, if any, Heinrich was involved in the far-right “Reichsbuerger” movement, which denies the existence of the modern German state and which prosecutors say inspired the group of arrested suspects.

The Reuss dynasty named all its male children Heinrich or Henry after the end of the 12th century in honor of Henry IV, Holy Roman Emperor, who bequeathed to them the estates of Lleda and Gera, now towns in the state of Thuringia.

While officially, there were no more princes and princesses in Germany, some descendants such as Heinrich continued to use the title. He had named his real estate and financial services company, based in Frankfurt, “Buero Prinz Reuss”.

House Reuss, which is currently headed by Heinrich XIV who lives in Austria, previously distanced itself from Heinrich XIII, calling him a confused man peddling conspiracy theories, according to local media.

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