Real estate consultant on housing market: ‘Everything costs more’
Tom Rood, SitusAMC Managing Director, discusses the increased costs of building a home and buying in the current real estate market
Signed contracts to buy previously owned homes in the U.S. plunged more than expected in June as rising mortgage rates and higher home prices continued to push entry-level homebuyers out of the market.
The National Association of Realtors said on Wednesday that its pending home sales index tumbled 20% in June compared with the same month one year ago. On a monthly basis, pending home sales dropped 8.6% – far more than the 1.5% decline projected by Refinitiv economists.
The interest rate–sensitive housing market has started to cool noticeably in recent months as the Federal Reserve moves to tighten policy at the fastest pace in three decades in order to cool consumer demand and bring scorching-hot inflation under control.
Policymakers already approved a 75-basis point rate increase in June and are expected to approve another of that magnitude on Wednesday at the conclusion of their two-day, policy-setting meeting. That would push the benchmark federal funds rate to a range between 2.25% and 2.50%, the highest since the COVID-19 pandemic began two years ago.
HOUSING STARTS IN JUNE PLUNGE TO LOWEST LEVEL IN 9 MONTHS