Refinance, Purchase Activity Slows as Mortgage Rates Surge
Refinance activity is at a standstill as borrowing costs continue to surge, and purchase activity is also significantly reduced from just a year ago. As homebuyers hit the brakes midway through 2022, layoffs are increasing in the mortgage industry, but refinancing activity could pick up steam if the market continues to cool, says Bill McBride in the CalculatedRisk Newsletter.
Though still historically low, the NAR reported that inventory was up 2.4% year-over-year in June, while Altos Research and Realtor.com indicate that active inventory is currently up 30% year-over-year. Housing shortages and rate hikes continue to burden prospective buyers across the U.S., but house prices are beginning to decelerate as the Fed’s inflation control methods cool an overheated market
We are seeing a sharp slowdown in the housing market, with more price reductions, more inventory, and fewer sales. It will take some time to see the impact on house price growth, but that is coming too. However, inventory growth has slowed recently, and inventory is key for predicting house prices.