Existing Home Sales Decline

The National Association of Realtors (NAR) recently reported that a 10th consecutive monthly decline had seen existing-home sales fall to¬† million in November 2022-a 37% drop compared to the same period last year. This shocking statistic will no doubt have an impact on real estate professionals and those in related industries, many of whom are already feeling the weight of the economic downturn. What Is The Cause of Decline in Sales? With the housing market beginning to show signs of strain, it’s important to understand what is causing such a decline in sales. Inventory, inflation and interest rates all play a factor in reducing sales volume. Out of all these factors, out of control inflation is hitting homeowners the hardest by driving interest rates higher.

The Federal Reserve has been forced

to increase the federal funds rate at an unprecedented rate in order to combat Hong Kong Phone Number Data inflation which in turn raises borrowing costs and causes lenders to tighten their restrictions on mortgages. To keep up with all these changes it is important for potential buyers and sellers, and even real estate professionals, to stay informed about market trends. Mortgage Rates Doubled in 2022! 2022 was a year to remember in terms of mortgage rates, as mortgage rates increased from 3% at the beginning of the year to 6.33%. Interest rates doubled in a single calendar year as reported by Freddie Mac. This is the first time mortgage rates have ever doubled like this. What caused such a sudden increase? Many experts believe it was due to inflation reaching a forty-year peak this year.

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Mortgage payments have to be calculated

on a case-by-case basis with a mortgage calculator. As a real estate agent, I receive DY Leads many questions regarding this spike in mortgage rates but my answer always remains the same: use the mortgage calculator and you’ll get the most accurate result. Mortgage Payment Example The following example is for principal and interest (P&I) payments only as property taxes and insurance rates vary across all communities. In addition, this example is to focus solely on interest rates. Let’s assume you want to borrow $400,000 for your mortgage.A $400,000 mortgage at 3% interest rate (the rate at the beginning of 2022) results in a monthly payment of $1,686 (P&I). In today’s market, a $400,000 mortgage at 6.33% interest rate (Average interest rate at the time of writing this article) results in a monthly payment of $2,484 (P&I). That is a huge difference of $798 per month.

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