Fleming said the increase in housing market potential could be attributed to low mortgage rates and rising household incomes – both factors contributing to an increase in home purchasing power, which increased 1.9% from last month.
More details: Delta Option Concerns Affect Mortgage Rates
“The main driver of the increase in home purchasing power was the delta drop in mortgage rates, a 0.1 percentage point decline over a 30-year fixed rate mortgage, in part due to economic and health uncertainty due to the Delta option. », Exerting downward pressure. on the yield of treasury bonds and, in turn, on rates on mortgage loans, ”he said. “With earnings unchanged at June’s level, the delta-fall in mortgage rates contributed to a $ 7,000 increase in home purchasing power. Household incomes also rose, leading to an increase in the purchasing power of homes by $ 2,500. The overall increase in the purchasing power of homes by $ 9,500 increased market potential with 41,300 potential home sales. ”
However, this was partially offset by an increase in the average life expectancy of people in their homes and the negative impact of the housing shortage on market potential, resulting in a drop in potential home sales of 9,100 units from a month ago.
“Overall, the average length of time people stay in their homes has increased since the housing market crash a decade ago, which means fewer and fewer people are listing their homes for sale, limiting housing supply and limiting potential sales. Fleming said. “You cannot buy what is not for sale, even if your purchasing power says you can afford it.”