Here are the latest numbers from the market and what they mean for you.
Today we’re going to once again dive deep into the numbers from the Oregon and Southwest Washington real estate markets to get a better understanding of what’s happening.
First, the Wells Fargo Home Builder Index, which shows the confidence level of new construction home builders, has been down five months in a row. Five months ago, the index was at 91%, showing that the market was phenomenal. Now, the index is only at 84%. However, historically speaking, builder confidence is still excellent.
According to the National Association of Realtors, sales have dropped year over year nationwide for five months in a row. During Q1 in the Portland metro, active listings were down 1.3% for the year, pending listings were down 3.7%, and closed sales were up 1.2%. Specifically for April, active listings fell by 16%, pendings dropped 2%, and sold listings decreased 7%.
For the year in Clark County, active listings rose 1.5%, pending sales dropped 2.5%, and closed sales fell by 3%. In April, active listings were down 17%, pendings fell 2%, and closed sales dropped by 9%.
Mortgage interest rates are the highest they’ve been since 2009, having risen by almost 2% since the beginning of the year. Remember that just a 1% increase in rates equals a 10% decrease in buyers’ purchasing power. Does that mean that homes are going to start depreciating? Fortunately, no. Inventory is still extremely low, which offsets the decrease in value that would normally come as rates rose. We’ll probably see a slowdown in the spring and summer markets, especially if the Federal Reserve keeps raising interest rates.
What’s the overall outlook for the housing market? Right now, it’s strong. Buyer demand is still high because interest rates are going up, and they want to lock in as low of a rate as possible. Supply, on the other hand, is still low. Since buyers are scrambling to find homes, sellers will also want to list quickly to take advantage of the demand and rising prices.
On the whole, I don’t see anything on the horizon that would suggest we’re going through a housing crisis, but I’ll continue to keep an eye on the data as the year progresses. If you have any questions about the market or need to buy or sell a home, give me a call or send me an email. I’d love to hear from you.