Weekly Real Estate Monitor

Housing Market at a Glance: the Last Month (ending May 22) 

Year-over-year percent change in  active listings inventory: 

Year-over-year percent change in  pending listings inventory: 

Ratio of pending listings per  10 active listings: 

Year-over-year percent change in  new listings in the past 4 weeks: 

Year-over-year percent change in  

-38.2% one year ago -1.9% 

-18%+40.5% one year ago 

8.6 

10.3 one year ago 

0% 

+18% one year ago 

pending sales in the past 4 weeks: 

Year-over-year percent change in  median sales price: 

Sale-to-list price ratio: 

Median days on market:  

-11.1% 

+15.6% 100.4% 13 

+20.5% one year ago+17.6% one year ago 

99.5% one year ago 16 days one year ago

Weekly Real Estate Monitor 

Pending Home Sales Declines 3.9% in April 

With mortgage rates climbing to over 5%, pending sales slid for the sixth consecutive month. Sales fell 3.9% in April from March.

Compared to the prior month, pending sales rose in the Midwest (+6.6%), a relatively more affordable region, but fell in the Northeast (-16.2%, South (-4.7%), and West (- 4.3%) regions.  

Compared to the prior year, pending sales dropped for the eleventh consecutive month, with a 9.1% year-over-year drop, and a decline in all regions. 

New listings are now outpacing new contract signings, easing the market imbalance.  During the four weeks ended May 22, there were nearly just 9 new pending sales for every 10 new listings. 

Weekly Real Estate Monitor 

Home Prices Still Rising at a Double-digit Pace of Nearly 16%  

With slowing demand, the median existing-home sales price on homes sold during the four weeks ended May 22 rose 15.6% on a year-over-year basis, somewhat slower than the pace one year ago (17.6%), but still a fast pace.

On average, homes are closing at a price slightly higher than the list price. The sale-to-list price ratio rose to 100.4% (99.5% one year ago). 

Weekly Real Estate Monitor 

Properties Typically Sold Faster in 13 Days  

Despite slowing demand, properties sold faster, with the median days on market at 13  days, compared to 16 days one year ago.  

However, properties could likely stay longer on the market in the coming months.  Among new pending contracts during the past four weeks, 51% sold within seven days, a lower rate than the 54% share on homes sold during the past four weeks... 

Weekly Real Estate Monitor 

Mortgage Home Applications Tick Up Slightly 

As mortgage rates decreased slightly to 5.25% for the second straight week, mortgage applications for a home purchase during the week of May 20 ticked up slightly by  0.2% from the prior week, but are down 16.4% from the prior year, according to the  MBA Weekly Mortgage Applications Survey. Applications are still seesawing between borrowers who are locking in at the current rates and interested homebuyers who can no longer afford the mortgage payment. 

As borrowers seek ways to have affordable payments, the share of adjustable-rate mortgages (ARM) has increased compared to 2% at the beginning of the year,  although the share of ARMs slightly fell to 9.4% of total applications.

Weekly Real Estate Monitor 

Monthly Mortgage Payment Rises by $700 from One Year Ago;  Income Needed to Afford a Mortgage Rises to $97,000  With a forecasted median existing-home sales price expected to hit over $400,000 in  May, a homeowner will typically pay $2,016 on a 10% downpayment 30-year loan, or nearly $700 more in monthly mortgage compared to one year ago, up 51% year-over-year. Meanwhile, estimated monthly wages are up by just $210. 

A family needs an income of at least $96,755 to afford a mortgage, up from $63,956  one year ago, or about $33,000 more. NAR considers a mortgage payment affordable if it is less than 25% of income. 

For a 1-earner family, the annual mortgage payment rises to 42.2% of the annualized average weekly wage ($1,108 weekly, $57,766 annualized), which means a family needs to have more than 1 worker in the family to afford a home. 

Weekly Real Estate Monitor 

New Home Sales Continues to Decline in April  

New 1-family home sales declined for the fourth consecutive month to an annualized rate of 591,000 in April. 

Sales fell 16.6% from March, a steeper decline than the 2.4% decline in existing home sales in April. 

New homes are more expensive than existing single-family homes, with a price difference of about $50,000, adding a mortgage payment of about $270/ month. With a mortgage rate of 5.3%, the monthly mortgage on an existing 1-family home is  $2,003/month compared to a new 1-family home of $2,270, assuming a 10%  downpayment.  

Weekly Real Estate Monitor 

Positive but Slower Net Absorption in Commercial Market  in 2022 Q2  

Absorption of multifamily apartment units remains positive ticked up in the three month-period through May 25 to 70,858 units compared to the prior quarter (61,026).  However, supply is improving, with the vacancy rate edging up to 5.3%. Rent growth has slowed to 9.7% from the double-digit pace in the past months.

In the office market, 12.5 million square feet (MSF) were absorbed in the past three months, from 3.4 MSF in the first quarter, with asking rents up 1.1% year-over-year. The vacancy rate remains elevated at 12.3%.  

In the industrial market, absorption is still positive but slowed to 87 MSF on a net basis in the three months. The sector has the lowest vacancy rate at 4%, driving up the year-over-year rent growth to 11.9%. 

In the retail property market, 18.9 MSF was absorbed in the past three months, a little slower than the 23 MSF in the first quarter. The vacancy rate is at 4.4%, with rents up  4.1% year-over-year.  

Download the Latest Commercial Market Insights Report and Commercial Metro  Market Reports.

Weekly Real Estate Monitor 

Commercial Sales Deals Exceed Pre-Pandemic Levels Except in  Office Sector  

Commercial sales deals rose robustly during the past four quarters across all core property types, with the largest sales volume in the multifamily market: multifamily  ($262.8 bn), surpassing the $167 billion deals prior to the pandemic. Sales deals for industrial properties were at $118.4 billion, also surpassing the pre-pandemic level of  $74 billion. In retail, total sales volume stood at nearly $90 billion, also surpassing the pre-pandemic deals of $67 billion. Only the office sector has a smaller sales volume of  $105 billion compared to the pre-pandemic level of $125 billion. 

Commercial sales prices increased on average across all markets, with the strongest pace for industrial properties at 16.5% year-over-year, followed by multifamily (10.5%).  Even office values have recovered (+3%) and prices of retail properties are also up  (+5.9%), even with the continuing challenge from e-commerce.

Download the Latest Commercial Market Insights Report and Commercial Metro  Market Reports.

Weekly Real Estate Monitor 

More Interesting Data 

Metro Area Housing Wealth Gains 

Homeownership is the largest source of wealth among families, with the median value of the primary residence worth about ten times the median value of financial assets held by families.1 Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.

Over the past 10 years, at the national level, a homeowner who purchased a  single-family existing home 10 years ago would have gained $229,400 in home equity if the home were sold at the median sales price of $360,700 in  2021 Q4. Home prices rose at a strong annual pace of 8.8% annually, yielding a pure gain due to a price appreciation of $209,400.

Read the full report here

NATIONAL ASSOCIATION OF REALTORS®  

RESEARCH GROUP