Housing Market Research Brief

Home purchases and prices stay on the descent. In the wake of the Federal Reserve’s fifth interest rate hike so far this year, borrowing costs for houses have skyrocketed. The average 30-year fixed-rate mortgage more than doubled since the beginning of 2022, surpassing 6 percent in September. Potential homebuyers are increasingly staying on the sidelines in response, with sales of existing homes plunging to a 27-month low this August. Weaker purchase activity, and ultimately more homes remaining on the market for longer, is coaxing some sellers to ease listing prices. The median cost of an existing single-family house fell for a third straight month in August to $384,500. Developers have taken notice and have trimmed the future pipeline, with higher interest rates also influencing their capacity. The slowdown in development may align with the current environment of a cooling housing market, however, it could exacerbate the shortage longer term.