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With FHFA indicating 5.5% home price appreciation year-over-year on limited supply, the blessing and the curse continues: homeowners gain equity while affordability for first-time buyers wanes.
Though mortgage rates made a decisive move off the near 8% mark, they are still relatively high and spreads over Treasuries remain larger than normal, exacerbated by government fiscal woes and international crises. Supply of existing homes is being constrained as homeowners with low rates stay where they are, perhaps a good scenario for builders of new homes which are making up more of that supply, but a challenge overall to supply and sales volumes.
With student loans restarting October 1, and mortgage payments restarting as COVID-era forbearances end—a great number of consumers are exhausting savings and resorting to higher credit card use, and their debts are rising. With the possibility the Fed is done raising rates (the conventional wisdom of the day) we can see the home market pick up in the spring for higher earning households while LMI borrowers struggle, at least until rates fall.