U.S. Housing Market: Sales Decline, Mortgage Rates Remain High, and Prices Drop in Florida and Texas

United States of America
Biden administration announces grant funding for affordable housing production and preservation
Existing and new home sales declining
Florida and Texas seeing major inventory increases and price drops
Mortgage rates remaining high, above 6.5%
Redfin's homebuyer demand index down 17% year over year
U.S. housing market experiencing significant downturn
U.S. Housing Market: Sales Decline, Mortgage Rates Remain High, and Prices Drop in Florida and Texas

The U.S. housing market is experiencing a significant downturn, with sales of existing and new homes declining and mortgage rates remaining high. This trend is expected to continue, potentially leading to a prolonged period of economic stagnation for the housing sector.

According to various reports, sales of existing homes have dropped significantly in recent months. Pending sales have also reached record lows, indicating that few people are buying homes despite the availability of inventory. New home sales have also plummeted, and builders are finding it increasingly difficult to finance new projects due to high borrowing costs.

The Federal Reserve's elevated interest rates continue to make it more expensive for both buyers and builders in the housing market. Record-high home prices have also locked many would-be first-time buyers out of the market, as they cannot afford the down payments or monthly mortgage payments. Housing makes up a significant portion of GDP, so this downturn is expected to pull down overall economic output.

The Biden administration has announced grant funding to help localities identify and remove barriers to affordable housing production and preservation. The Treasury Department will allocate $100 million over three years to a new program at the Community Development Financial Institutions Fund to support affordable housing production.

Despite these efforts, mortgage rates have remained above 6.5%, which may hinder the recovery of the housing market according to Capital Economics. Existing home sales dipped 0.7% in May from a month earlier and 2.8% from the prior year, while new home sales plummeted 11.3%. Pending home sales fell to an all-time low of -2.1% in May on an annual basis, with every region registering declines.

Redfin's homebuyer demand index is down 17% year over year, indicating that fewer people are actively looking to buy homes. Some experts believe that the U.S. housing market is entering a 'crash stage' in multiple cities, with significant price drops on a month-to-month and year-over-year basis.

Florida and Texas have seen a significant increase in inventory and homes for sale, leading to major sell-offs and price drops. In Florida, there were 200,997 homes for sale in May, up 40.1% year-over-year. The number of newly listed homes was up by 12.5% compared to a year earlier.

Sellers in Texas have also slashed prices in cities like Fort Worth, Dallas, and Houston due to still-high mortgage rates and new inventory flooding the market.

The housing market is expected to remain challenging for both buyers and sellers until mortgage rates decline significantly or home prices adjust downward.


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Confidence

85%

Doubts
  • Are there any specific cities or regions experiencing more significant price drops than others?
  • How long will it take for mortgage rates to decrease significantly?
  • What is the exact cause of the decline in mortgage rates?

Sources

81%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

The US housing slump deepened in spring. Where does that leave shoppers and sellers?

ABC NEWS SITE NAMES Name: ABC News Site Names URL: https://abcnews.go.com/Politics/us-officially-blames-iran_106834435 ABC News Monday, 08 July 2024 16:45
  • Unique Points
    • The housing market has shown little improvement after a disappointing spring season.
    • The average rate on a 30-year home loan moved above 7% for the first time since November.
    • Record-high home prices and historically low inventory forced many would-be buyers to put their house hunt on hold.
    • Sales of previously occupied U.S. homes declined in the March-June period from a year earlier in 2022 and 2023.
    • The inventory of homes on the market remains historically low.
    • Home prices are cooling as more homes sit on the market longer and some metro areas have seen price growth ease.
  • Accuracy
    • Sales of previously occupied U.S. homes declined in the March-June period from a year earlier in 2022 and 2023.
    • The inventory of homes on the market remains historically low.
  • Deception (50%)
    The article contains selective reporting as it only reports details that support the author's position about the housing market's trajectory and the challenges homebuyers face. It does not mention any positive developments or counterarguments. The author also makes editorializing statements such as 'the housing market shows few signs of busting out of its three-year funk' and 'the large gap between current mortgage rates and where they were just three years ago (3%) has also discouraged many homeowners who secured rock-bottom rates from selling.' These statements are the author's opinions, not facts.
    • The housing market shows few signs of busting out of its three-year funk
    • the large gap between current mortgage rates and where they were just three years ago (3%) has also discouraged many homeowners who secured rock-bottom rates from selling.
  • Fallacies (85%)
    The author makes several appeals to authority and uses inflammatory rhetoric. They quote economists and real estate experts to establish the housing market's current state and future projections. However, they do not explicitly make any fallacious arguments based on these quotes. Instead, they use descriptive language like 'disappointing spring season' and 'three-year funk' to frame the situation in a negative light. This inflammatory rhetoric does not constitute a logical fallacy but can be seen as biased.
    • ]The housing market shows few signs of busting out of its three-year funk[
    • Sales declined in March, April and May of this year
    • The large gap between current mortgage rates and where they were just three years ago (3%) has also discouraged many homeowners who secured rock-bottom rates from selling
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

79%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Real-estate crash: Correction looms for US property market, strategist says

Business Insider Jennifer Sor Monday, 08 July 2024 16:47
  • Unique Points
    • Chris Vermeulen predicts a steep price correction in the US property market, with both residential and commercial properties experiencing a 30% drop in prices.
    • ,
  • Accuracy
    • ]The housing market has shown little improvement after a disappointing spring season[
    • Home prices continue to set all-time highs despite weak demand and affordability issues
  • Deception (30%)
    The author makes several assertions that imply a potential real estate market crash is imminent. She quotes Chris Vermeulen, who is described as a longtime strategist and founder of The Technical Traders, making predictions about a steep price correction in both residential and commercial properties. The author also mentions signs of weakness in the US economy, such as unexpectedly soft retail sales and rising layoffs. However, these statements are not presented with any peer-reviewed studies or data to back them up. Additionally, the author uses emotional manipulation by implying that people will soon be unable to pay their mortgages and that unemployment will peak at 5%. This is a sensationalist way of presenting the potential economic downturn.
    • Eventually, people aren’t going to be able to pay their mortgages.
    • What we're starting to see is people starting to realize they can't afford their mortgages, or they need to downgrade. A lot of people are struggling financially, and this is really the tip of the iceberg.
    • People are going to have to start to sell their homes
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (95%)
    The author expresses a clear bias towards the belief that a real estate market correction is imminent and that it will result in significant price drops. She quotes Chris Vermeulen extensively to support this view, using language like 'steep price correction' and 'wave of distress'. While there is evidence presented in the article to support this perspective, such as rising foreclosures and unemployment, the author does not provide any counterarguments or acknowledge alternative viewpoints.
    • Eventually, people aren’t going to be able to pay their mortgages.
      • People are going to have to start to sell their homes
        • What we're starting to see is people starting to realize they can't afford their mortgages
        • Site Conflicts Of Interest (100%)
          None Found At Time Of Publication
        • Author Conflicts Of Interest (100%)
          None Found At Time Of Publication

        83%

        The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
        (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

        A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

        If mortgage rates stay above 6.5%, ‘the chances of an imminent recovery are slim’ for housing demand, Capital Economics says

        Fortune Media Inc. Alena Botros Friday, 05 July 2024 00:00
        • Unique Points
          • Mortgage rates have been above 6.5% this year and Capital Economics expects them to remain so, which may hinder housing market recovery.
          • Existing home sales dipped 0.7% in May from a month earlier and 2.8% from the prior year.
          • New home sales plummeted 11.3% in May.
          • Pending home sales fell to an all-time low of -2.1% in May on an annual basis, with every region registering declines.
          • Redfin's homebuyer demand index is down 17% year over year.
        • Accuracy
          No Contradictions at Time Of Publication
        • Deception (30%)
          The article contains selective reporting and emotional manipulation. The author quotes Capital Economics stating that 'if mortgage rates stay above 6.5% this year, then the chances of an imminent recovery are slim.' This statement is used to create a sense of urgency and fear about the housing market, but it does not provide any context about why 6.5% is a significant threshold or what would happen if mortgage rates were to fall below that level. Additionally, the author quotes Robert Reffkin stating 'That'd be marketing magic, and would tell the world that mortgage rates are at a level where they should go and grab a property.' This statement is used to create an impression that lower mortgage rates will lead to a surge in demand for homes, but it does not provide any evidence or data to support this claim. Furthermore, the author uses phrases like 'diminishing demand' and 'weakening demand' without providing any quantitative data or context about what these terms mean.
          • It could be the magic mortgage rate for would-be sellers too.
          • If rates go down just another percentage point…prices are going to go through the roof,
          • The housing market is still stuck, and “if mortgage rates stay above 6.5% this year—as we expect—then the chances of an imminent recovery are slim,” Capital Economics' Thomas Ryan wrote earlier this week,
        • Fallacies (100%)
          None Found At Time Of Publication
        • Bias (95%)
          The author expresses a clear bias towards the idea that mortgage rates above 6.5% are hindering housing demand and recovery. She repeatedly mentions this threshold throughout the article and presents it as a significant factor in the current state of the housing market.
          • if mortgage rates stay above 6.5% this year
            • it might not last much longer
              • >the chances of an imminent recovery are slim<
              • Site Conflicts Of Interest (100%)
                None Found At Time Of Publication
              • Author Conflicts Of Interest (100%)
                None Found At Time Of Publication

              95%

              The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
              (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

              A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

              ‘Stuck’: Housing market malaise may last for years

              Politico News Site Name: POLITICO Full Legal Name of News Site: Politico LLC Location of News Site: Washington D.C., USA Friday, 05 July 2024 00:00
              • Unique Points
                • Sales of existing homes are down and pending sales have reached a record low.
                • ’Residential investment has fallen due to the highest borrowing costs in over two decades.
                • Home sales activity is at a 30-year low, making economic activity associated with home sales depressed.
                • The Federal Reserve's elevated rates continue to make it more costly to build and finance home purchases.
                • Record-high home prices have locked many would-be first-time buyers out of the market.
                • Housing makes up a huge chunk of GDP, with spending on residential investment alone comprising up to 5% of economic output. As that spending dries up, it will pull down GDP.
                • The Biden administration has announced grant funding to help localities identify and remove barriers to affordable housing production and preservation.
                • Treasury will allocate $100 million over three years to a new program at the Community Development Financial Institutions Fund to support affordable housing production.
              • Accuracy
                • Housing starts in May dropped to their lowest level since June 2020.
                • Residential investment has fallen due to the highest borrowing costs in over two decades.
              • Deception (100%)
                None Found At Time Of Publication
              • Fallacies (85%)
                The article contains several instances of amplification through the use of adjectives and superlatives, which can be considered a form of informal fallacy. The author uses phrases such as 'major drag on the economy', 'once-hopeful market that makes up as much as 18 percent of the economy', 'bleak picture', 'depressed level', and 'huge chunk' to exaggerate the severity of the situation in the housing market. This type of language is used repeatedly throughout the article, making it difficult to assess the true extent of the problem. Additionally, there are instances where causality is assumed without sufficient evidence being provided, which can be considered a form of formal fallacy. For example, when stating that 'The Fed’s elevated rates continue to make it more costly to build and more difficult to finance home purchases', the author assumes that the Fed's interest rates are directly causing these issues in the housing market without providing any evidence or data to support this claim.
                • ]Sales of existing homes are down, and pending sales have sunk to a record low.[
                • The U.S. housing market – plagued by high interest rates and sluggish sales – is poised to become a major drag on the economy heading into the election.
                • Housing makes up a huge chunk of gross domestic product, with spending on residential investment alone comprising up to 5 percent of economic output.
              • Bias (100%)
                None Found At Time Of Publication
              • Site Conflicts Of Interest (100%)
                None Found At Time Of Publication
              • Author Conflicts Of Interest (0%)
                None Found At Time Of Publication

              83%

              The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
              (Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

              A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

              Housing Market Entering 'Crash Stage' in Multiple Cities

              Newsweek LLC Giulia Carbonaro Thursday, 04 July 2024 09:07
              • Unique Points
                • CEO of Reventure Consulting, Nick Gerli, believes the U.S. housing market is entering a 'crash stage' in multiple cities.
                • 'Many metropolitan areas are experiencing price drops on a month-to-month and year-over-year basis.'
                • 'Florida and Texas have seen a significant increase in inventory and homes for sale, leading to major sell-offs and price drops.'
                • 'In Florida, there were 200,997 homes for sale in May, up 40.1% year-over-year. The number of newly listed homes was up by 12.5% compared to a year earlier.'
                • 'Sellers in Texas have also slashed prices in cities like Fort Worth, Dallas, and Houston due to still-high mortgage rates and new inventory flooding the market.'
              • Accuracy
                • CEO of Reventure Consulting, Nick Gerli, believes the U.S. housing market is entering a ‘crash stage’ in multiple cities.
                • Many metropolitan areas are experiencing price drops on a month-to-month and year-over-year basis.
                • Florida and Texas have seen a significant increase in inventory and homes for sale, leading to major sell-offs and price drops.
                • In Florida, there were 200,997 homes for sale in May, up 40.1% year-over-year. The number of newly listed homes was up by 12.5% compared to a year earlier.
                • Sellers in Texas have also slashed prices in cities like Fort Worth, Dallas, and Houston due to still-high mortgage rates and new inventory flooding the market.
              • Deception (30%)
                The author makes several statements that imply a housing market crash is imminent in multiple cities, but does not provide any concrete evidence or peer-reviewed studies to support this claim. The author quotes Nick Gerli making assertions about price drops and inventory spikes in certain cities, but these statements are not backed up with data or statistics from reliable sources. This selective reporting and sensationalism earns a score of 30.
                • We're seeing a major sell-off take place that's now causing prices to go down. And I suspect this could be the start of a very large correction.
                • Only 11.7 percent of homes in Florida sold above list price in May, down 4.0 points year-over-year.
                • The U.S. housing market is already entering a "crash stage" in multiple cities across the country, according to expert Nick Gerli, CEO and founder of real estate analytics firm Reventure Consulting.
                • There were 200,997 homes for sale in Florida in the month of May, up 40.1 percent year-over-year.
              • Fallacies (100%)
                None Found At Time Of Publication
              • Bias (95%)
                The author, Giulia Carbonaro, expresses a clear bias towards the idea that certain housing markets in the US are entering a 'crash stage'. She repeatedly uses the term 'crash stage' to describe these markets and emphasizes that this is being ignored by mainstream headlines. This language implies a strong negative connotation and suggests that these markets are experiencing something catastrophic, which may not be an accurate representation of the situation.
                • But yes, it’s reasonable to expect that this will spread to other parts of the country...
                  • Many metropolitan areas are experiencing price drops on a month-to-month basis and even year-over-year...
                    • Sellers in Texas have also slashed prices in cities like Fort Worth, Dallas and Houston...
                      • That’s why Texas and Florida—which both saw a huge influx of out-of-state people during the pandemic relocating to the two states, boosting competition for homes and bringing up prices—are now seeing some of their markets softening.
                        • The U.S. housing market is already entering a ‘crash stage’ in multiple cities across the country, according to expert Nick Gerli...
                          • We’re seeing a major sell-off take place that’s now causing prices to go down. And I suspect this could be the start of a very large correction...
                          • Site Conflicts Of Interest (100%)
                            None Found At Time Of Publication
                          • Author Conflicts Of Interest (100%)
                            None Found At Time Of Publication