Facts, Fiction & Inspiration
Updated: Sep 29, 2022
Pricing remains strong, inventory remains low
Home Equity is the biggest contributor to Net Worth
The Economic Symposium is starting and is an important meeting
Fiction... The real estate market is crashing.
1.) The national median home price rose by 5.9% last month to $439,400, which is up a little over 8% year over year. While we are seeing an activity slow down in housing, pricing is still quite strong. (MBS Hwy 08/23/2022)
Chief Economist from the National Association of Realtors, Lawrence Yun, believes that the number of home sales should start to rise by early next year and we are at or close to the bottom in contract signing. He went to say that home prices are still rising by double digits year over year, but annual gains should moderate to 5% by year end and into 2023. (MBS Hwy 08/24/2022)
To make you feel better — 31% of buyers said they paid over the asking price. 36% made an offer on a home without seeing it in person first. 80% of buyers said they made more than one offer, with 41% making 5 offers or more. (CNBC)
At the current pace of sales, when factoring in the amount of completed homes, there is only about 1 month of supply. (MBS Hwy 08/23/2022)
2.) On average 2/3 of net worth comes from home equity!
An article by Kiplinger laid out just how important home ownership is to your net worth. Net worth is defined as your assets – liabilities. Below are the net worth tiers:
To be in the top 1% in the US --- your net worth is $10.8M
Top 2% ---- $2.5M
Top 5% ---- $1M
Top 10% --- $.8M
Top 50% ---$.5M
3.) Thursday 8/25 kicked off the Jackson Hole Economic Symposium. Despite elevated inflation and aggressive Fed action, recent economic data highlights the US economy’s continued resilience – consumer spending remains strong and unemployment remains low. As a result, the Fed reiterated its intention to continue raising interest rates and keep them elevated until inflation is fully under control. Prior to the Fed’s remarks, many had believed that the Fed might start cutting rates this Spring, but its staunch commitment to fighting inflation caused mortgage rates to rise. However, there’s reason to be optimistic. Two measures of inflation (CPI and PCE) both showed declines since June. While we are still far from the Fed’s inflation target, we are at least heading in the riht direction.
“Stop trying to calm the storm. Calm yourself, the storm will pass” – Buddhist quote