All right, time now for your Thursday RBI. And tonight we’re talking about real estate, the housing market, not the terrific indie band from New Jersey. Because for those of you looking to buy a home, your dreams just kidding. Dashed. Or at least getting more expensive, the 30 year fixed rate mortgage jumped to its highest level this year. According to Redfin, the median home sales price hit 380,250. That is 3 grand shy of 2022’s all time sort of pandemic panic buying driven record, so prices and borrowing costs are up. That’s a pretty toxic combo I would imagine. And now the median monthly housing payment hitting a record $2775? That’s up 11% from a year ago. And that number is even more striking when you kind of zoom out for years. The monthly mortgage payment needed to buy the median priced home for sale when rates were down and prices were lower in 20/20 was 14180 dollars. That according to Creative Planning’s Charlie Balello. It rose to 1690 and 2021. Then it popped to 2400 and 2022 and 2550 last year. It’s now 2775. That is a jump of 88% or so in the last four years. Now all of this and lack of homes for sale is smacking existing home sales. They dropped 4.3% in March. Doesn’t sound like a lot, but it’s the biggest percentage decline in more than a year, Ted. Insult to injury, the cost of insurance premiums, property taxes, maintenance, whatever have all also gone up, which means costs just keep going up and up. So when will if home buyers see any relief? Let’s talk about it with Zillow chief economist Skyler Olson. And Skyler. If you had told me, Brian, we’re going to see interest rates spike, but the price of homes will also go up, I would have said that’s crazy because people buy homes on the monthly payment, but that’s exactly what’s happened. Yeah. Well, the reality is though that about 70% of sellers are also buyers. So sellers are sensitive in this environment as well. In fact, if we look at the numbers, you know, over March, the fastest appreciating markets were actually the most expensive. They were the California coastal markets. And why was that? Well, those are the places we also saw the most aggressive pullback. Well, a continued pullback right from existing owners just not putting their homes on the market for sale. So overall across the country we still have this experience of not enough homes and enough buyers are still willing to move forward. In March, homes successfully priced and well marketed popular neighborhoods. The typical home that went pending in March did so still in only 13 days even at these prices, even at these mortgage rates. Don’t get me wrong, there are places where homes are starting to linger more. Florida and Texas are markets where new listings are back up, perhaps for some of the reasons that you have mentioned where it’s holder harder for existing owners to maybe you know choose to hold on to higher insurance rates that were a surprise to them. So there’s a lot of different things going all across this country, but certainly not a dull moment now that mortgage rates have come up and and and and again I can’t speak for every market, I mean there’s every market is local. But when I look at pockets of markets, shocking number of all cash buyers and they don’t care about mortgage rates, they could care less. Yeah, yeah. And those are actually the same. You know if we, so we mentioned Texas, we mentioned Florida earlier. You know those areas where people aren’t as locked in for a couple of reasons. One, lots of folks or at least a larger share of the population are free and clear on their mortgage, right. They’re older boomers. They moved down there with equity growth over the past, you know, 15 years. These are the areas that we’re not as locked in. This is where we’re seeing a return of inventory, where we are seeing home prices falling. Home prices fell over the year in Austin, New Orleans, right, and are getting very, very soft and kind of other major metros in Texas. So and actually because of mortgage rates swinging up, we saw record numbers of price cuts. So a sign that things are, yeah, slowing down out there on the price in front, but on net not necessarily falling, certainly not quickly.
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