THE BIG SPLASH

More Renters Are Opting Out of Homeownership

A majority of U.S. renters don’t believe they’ll ever be able to afford to buy a home, with 66% saying rising home prices have made the prospect of homeownership “hopeless,” according to a survey of 1,000 renters by Home Bay.

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• With median home prices up 33% since January 2020, 77% of renters say the U.S. is experiencing an affordable housing crisis.

• Despite 51% of respondents considering owning a home to be a “very important” financial milestone, the majority of respondents prioritized other achievements, such as being debt-free, having a comfortable retirement, and owning a car.

• Almost 80% of renters said they couldn’t afford a home in general, 72% said they couldn’t afford a down payment, and 71% cited high interest rates as reasons they didn’t own a home.

• Nearly 25% of renters spend more than half their income on rent, compared with the recommended target of 30%.

• However, many renters who want to own a home are willing to take on additional work or sell their plasma to make it a reality.

A SCOOP OF MARKET DATA

Housing Market Continues to Heat Up

Home prices in the US rose more than previously thought in the first quarter of 2023, according to a report by mortgage technology and data provider Black Knight. The firm reported a 0.45% increase in home prices in March from February, marking the strongest single-month gain since May 2022.

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• Black Knight revised February’s monthly growth in prices higher to 0.43% from 0.16%, and reversed its previously reported 0.13% decline in January to a 0.13% month-over-month gain.

• The uptick in home prices, coupled with inventory shortages and higher mortgage rates, poses challenges for buyers entering the market.

• Sales activity rose in March but worsening inventory challenges made it difficult for buyers to find properties.

• Inventory levels have dropped for the sixth consecutive month and active for-sale inventory is at its lowest level since April 2022. The for-sale shortage is largely attributed to higher mortgage rates, which are keeping potential move-up sellers stuck in place.

• Despite decelerating year-over-year home price growth, low inventory levels are expected to limit further price declines in the coming months.

A SCOOP OF MORTGAGE

Mortgage Rates Take a Breather

The average long-term US mortgage rate fell this week, bringing relief to prospective homebuyers. According to mortgage buyer Freddie Mac, the rate on the 30-year fixed mortgage dropped to 6.39%, down from 6.43% the previous week.

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• However, the 15-year fixed mortgage rate rose slightly to 5.76%. This week's decline comes after two consecutive weeks of increases and can be attributed to recent volatility in the banking sector and comments from the Federal Reserve regarding its policy outlook.

• The lack of inventory remains a significant challenge for affordability despite interest rates hovering in the mid-six percent range. Higher mortgage rates, combined with already high home prices, have discouraged many potential buyers, leading to a lackluster spring homebuying season.

• According to the National Association of Realtors, sales of previously occupied US homes fell 2.4% from February to March and were down 22% from a year earlier.

• While shifts in the Fed's short-term lending rate don't directly impact mortgage rates, they do affect the yield on 10-year Treasury bonds, which lenders use as a guide to pricing home loans.

A SCOOP OF CELEBRITIES

Drake says goodbye to the U.S.

Drake, the Canadian singer, is leaving the United States after putting his Beverly Hills estate up for sale for $88 million, the last of his properties in the country.

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• According to an insider, the 36-year-old artist does not have any plans to buy another property in the US any time soon and is most comfortable in his hometown of Toronto, Canada’s largest city.

• The property he is selling was bought by Drake only a year ago for $75 million from English pop star Robbie Williams, who purchased it for $33 million in 2015.

• The sprawling 24,260-square-foot estate has seven bedrooms, 13 bathrooms, a tennis court, a pool, and other amenities such as a gym, a wine cellar, and a game room.

• Drake’s current residence is in the Bridle Path area of Toronto, where he custom-built a 50,000-square-foot mansion on a 2-acre plot of land in 2015.

• The house includes an NBA regulation-size indoor basketball court, a pool, a hall of sports jerseys, and his own awards room with his Grammy awards on display.

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