The “New Normal”. Don’t you hate that? We keep hearing it now more and more frequently, but maybe it’s really true now. Here’s why:
- HOUSING AFFORDABILITY: While prices and rates are coming down, it is not enough to change the math.
- “AFFORDABILITY INDEX”: This is calculated by the National Association of Realtors and it rose to 95.5 in November. Compare that to the 12 months before COVID when it averaged 162. (Lower values indicate more affordability.)
- MORTGAGE RATES ARE LOWER: 6.15% for 30 Year, down from 7.08% in early November.
- HOUSING SALES PACE: 4.02 million existing home sales in December. The lowest since November 2010.
- CAN WE TURN BACK THE CLOCK? Sure, IF:
- The average mortgage rate falls to 2.6%, or
- Home prices fall by about ⅓, or
- Family incomes increase by 50%.
- SO HENCE THE “NEW NORMAL”: If your business has anything to do with homes, furniture, decorating, construction, and the like, this is vitality important for you to know so you can plan and budget for a profitable 2023.
- GOOD NEWS! Lots of Americans are entering the home-buying years. The two largest population segments in the US are ages 30-34 and 25-29. When houses sell, people buy all sorts of items for their new living space!
Until next week, Onward & Upward!