What’s in The Shaker today:

• 📈 Mortgage Hike Deters Homebuyers

• 🔥 Bubble Burst? Think Again!

• 💰Investor Invasion in Affordable Housing

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Mortgage Hike Deters Homebuyers

Mortgage rates are on the rise again, causing a noticeable dip in homebuying activity.

• The average rate for 30-year fixed-rate mortgages climbed to 6.87% from 6.80% in just one week, marking the highest rate since early December 2023.

• This uptick in rates led to a 2% decrease in refinance applications and a 3% drop in home purchase applications compared to the previous week.

• The recent surge in mortgage rates, reaching 7.08% following an unexpected inflation report, is adding to the affordability challenges and low housing inventory, further dampening buyer enthusiasm.

Bubble Burst? Think Again!

Despite widespread speculation, the anticipated housing market crash hasn't materialized, debunking the myth of a bubble and suggesting high home prices are here to stay.

• Steady as She Goes: Despite dire predictions, the housing market has remained resilient, with a modest 4% increase in median home-sale prices in 2023, defying the bubble burst theory.

• Supply Struggles: The root cause of high prices isn't speculative frenzy but a stark supply shortage, exacerbated by underbuilding post-2008 and a surge in demand from millennials reaching homebuying age.

• No Crash on the Horizon: With homeowners in good financial standing and a significant supply-demand imbalance, experts predict a continued modest rise in home prices, dismissing fears of a dramatic downturn.

Investor Invasion in Affordable Housing

In the final quarter of 2023, investors gobbled up over a quarter of the low-priced housing market, setting a new record and potentially sidelining first-time homebuyers.

• Bargain Hunting: A whopping 26.1% of affordable homes fell into the clutches of investors, as defined by Redfin, marking a historic high in their pursuit of the more budget-friendly end of the market.

• Market Dynamics: With mortgage rates and home prices still riding high above their pre-COVID levels, investors found the allure of low-priced homes irresistible, despite a general slowdown in the housing market.

• The Bigger Picture: While the overall homeownership rate hovers around 65.7%, young people have seen a slight uptick in homeownership since pre-pandemic times, suggesting a mixed impact of investor activity across different demographics.

How was today's shake?

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