Housing Finance Watch and Inflation Watch (Week 50, 2022) | American Enterprise Institute

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Key takeaways:

Key takeaways:

• Purchase volume in week 50 was down 41% from 2021, but the seasonal slowdown was more mild than previous years as the rates have fallen 5/8 ppt. over the last 6 weeks.
• Y-o-y HPA is projected to moderate to 5% and 3% in Dec. 2022 and Jan. 2023, respectively.
• The 10-year old seller’s market is showing its age, with moderate purchase volume & HPA declines due to sharply higher rates & a cumulative 38% increase in HPA since Jan. 2020.
• Metros with less affordability are hit the hardest: the Western metros of San Jose, San Francisco, Seattle, and Sacramento are already having y-o-y HPA declines.
• Over time price declines will spread to the low end of some FHA markets & in metros with stagnating or declining job growth.
• We expect the national seller’s market to end in 2023.