Boomers back in charge

From Bank of America:

The Great Migration continues

The rise of Boomers as the main homebuyer

The latest Home Buyers and Sellers Generational Trends report from the National Association of Realtors found that for the first time since 2014, Baby Boomers overtook Millennials as the generation with the biggest share of homebuyers. From July 2021 to July 2022, 39% of surveyed homebuyers were Baby Boomers, followed by 28% of Millennials and 24% of Gen X (Exhibit 6).

The rise of Baby Boomers as the primary homebuyers can be attributed to three main reasons. First, as this generation retires, they move closer to family and friends. Second, demand for smaller homes increases as their children move out. Last but not least, Baby Boomers hold the greatest wealth across generations at $73 trillion in 4Q 2022, eight times that of Millennials (Exhibit 7). In the current environment of high home prices and interest rates, Baby Boomers are better equipped financially for home purchasing. In fact, only 49% of older Boomers (68-76 y/o) financed their home purchase in 2022, compared with 93% of those aged 33-42 y/o, according to the same National Association of Realtors report.

Given the importance of Baby Boomers in the housing market, where are they moving to?

The generational breakdown of Bank of America internal data suggests Baby Boomers’ migration patterns over the past few years have been different from other generations. Specifically, while Austin continues to attract inward migration overall, the number of Baby Boomers in the city has declined over the past year. The exodus of the group with the most cash could have added to the downward pressure on Austin’s home prices over the last year.

Las Vegas, Phoenix, Tampa, and Orlando are among the most popular destinations for Baby Boomers, according to Bank of America internal data (Exhibit 8). Note that the pace of migration slowed for Vegas and Phoenix over the past year, but was relatively unchanged for Tampa and Orlando. In our view, this could partly explain the still resilient home price appreciation in Tampa and Orlando relative to other cities.

Alternatively, Baby Boomers, similar to other generations, are leaving some of the largest cities in the US, including the Bay area, New York and Seattle (Exhibit 9).

Millennials will likely drive home buying in the longer term

Source: Bank of America internal data

For Millennials, the most popular destination for domestic migration is Austin, with the number of Millennial customers up 16% in 1Q 2023, relative to three years ago, which led other cities by a wide margin. Cleveland, Tampa, and Dallas each saw a 6% increase in Millennial population over the past three years.

In the near term, many of this cohort are staying on the home buying sidelines. A recent Bank of America Global Research survey found that increasing concerns about affordability are the top reason many Millennials are staying out of the housing market. But hopeful buyers who may be waiting for the market to cool are still forging ahead in their own way. In a separate Bank of America 2023 Homebuyer Insights Report, over half of respondents who are not planning to purchase a home in the near term are still actively scrolling through real estate marketplace apps.

This means that demand for home purchasing will likely return when we move past the current housing cycle, especially in the case of younger Millennials, who are entering prime home buying age. In 1Q 2023, the home ownership rate for those younger than 35 years old was 39%, 23 percentage points lower than that for 35–44-year-olds.

Posted in Demographics, Economics, National Real Estate, NYC | 54 Comments

It’s a bargain, darling.

From the NY Post:

Beach bargains: Hamptons luxury home prices are dropping

After numerous record-breaking, pandemic-fueled, $100-million-plus mega-mansion sales, the hyped up Hamptons may have finally hit a wall. 

The number of East End home sales fell to their lowest level in 14 years in the first quarter of the year, according to Douglas Elliman. 

Meanwhile, the median home price saw a 7.6% decline, down to its lowest point since 2019, according to Town & Country Real Estate.

“The overall feeling is that there are buyers and that there is still demand,” says Scott Bradley, a Hamptons specialist with Saunders & Associates. “I think inventory is the leading culprit of the sluggish sales we’ve seen.”

Most of the trophy homes that traded during the pandemic remain happily occupied, leaving little for hungry buyers to choose from. And many have taken a wait-and-see approach due to soaring interest rates, a shaky stock market and the looming threat of “the R word.”

But there is some good news for fearless shoppers: Discounts. Spectacular summer homes from Quogue to Montauk are chopping prices to entice wallflowers to the dance floor.

At 335 Town Lane in Amagansett’s estate section, Alec Baldwin is asking $22.5 million for his sweet-as-can-be stunner on 10 acres. 

The two-story, 10,000-square-foot, cedar-shingle modern farmhouse, with five bedrooms and five full baths, listed back in November 2022 for $29 million, before being reduced in January and again in March to its current price. 

Back on the beach, 33 Lily Pond Lane — a 7,000-square-foot, six-bedroom, eight-bathroom, oceanfront oasis in East Hampton — hit the market in the heady days of August 2021 asking $64 million. 

That’s been whittled down to its current ask of $44.5 million. 

Priced to move, the mansion comes with all the bells and whistles, including a pool, a six-room pool house, game rooms, a sauna, gardens, a koi pond and the only lit private tennis court in East Hampton. Hedgerow Exclusive Properties has the listing with Douglas Elliman’s Michaela Keszler and Erica Grossman.

Posted in Economics, NYC, Price Reduced, Shore Real Estate | 56 Comments

NJ labor force participation at 10 year high

From Insider NJ:

New Jersey Labor Market Remains Robust; Unemployment Rate Steady at 3.5% 

New Jersey’s labor market remained strong in April, with nonfarm employment increasing by 15,800 jobs to a seasonally adjusted level of 4,332,300, and the unemployment rate holding steady at 3.5 percent, according to preliminary estimates from the U.S. Bureau of Labor Statistics.

The gain occurred entirely in the private sector, which recorded a month-over-month increase of 15,900 jobs while the public sector shed 100 jobs for the month. The labor force participation rate continued to rise, reaching 65.0 percent in April, the highest rate since June 2013.

The March preliminary employment estimates were revised upward by 5,400, for a gain of 2,800 jobs from February to March. Preliminary estimates indicated a loss of 2,600. The March unemployment rate remained at 3.5 percent.

In April, seven out of nine major private industry sectors experienced job growth. Sectors that recorded employment increases were professional business services (+7,600), trade, transportation, and utilities (+3,600), education and health services (+2,700), leisure and hospitality (+1,200), financial activities (+600), construction (+300), and other services (+200). Sectors that recorded a loss were information (-300) and manufacturing (-100).

Over the past year, New Jersey has added 99,100 nonfarm jobs. These gains were distributed across industries, with eight out of nine major private industry sectors recording job gains. The industries recording year-over-year gains were education and health services (+45,400), leisure and hospitality (+25,600), trade, transportation, and utilities (+8,100), professional and business services (+5,500), other services (+4,000), construction (+3,800), manufacturing (+3,700), and information (+1,400). The only private sector industry to record a loss from April 2022 to April 2023 was financial activities (-200). Year-over-year, the state’s public sector added 1,700 jobs.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 15 Comments

How much money would you dump into 900 square feet?

From the NYT:

Priced Out of the City, They Bought a Tiny Suburban Home. Now What?

Much has been written about “good enough” marriages, but what of “good enough” houses in “I guess we have to live somewhere” neighborhoods?

This is the story of a family who began with low expectations and then fell in love.

In 2016, Amanda and Alain de Beaufort were renting an apartment with a garden in Sunset Park, Brooklyn, where they had access to a new school with a Spanish/English program for their two children. (Mr. de Beaufort, 49, is from Colombia.) The family had achieved urban-suburban balance in a community they treasured. They were happy.

Then one day, their landlord sold the building for cash and gave them a month to pack up and move out.

“OK, we’ll just buy something in Sunset Park,” Ms. de Beaufort, 46, recalled saying, before making the cruel discovery that no affordable properties remained in the neighborhood. The couple cast their eyes on nearby Bay Ridge, Brooklyn. They flirted with Westchester County.

They did not consider New Jersey. “It wasn’t cool,” Ms. de Beaufort said.

Soon, she was sleeping on the sofas of friends as she house-hunted, while her husband and children bunked at her parents’ home in New Hampshire. In this precarious state, they succumbed to a campaign waged by a friend in Maplewood, N.J., who described that township, about 20 miles west of New York City, as a cross-Hudson-River extension of Brooklyn. (At least one newspaper article has made the same comparison.)

The couple bought a small house on a pretty, tree-lined street in Maplewood and declared it their not-forever home.

If they were going to move to the suburbs, they thought, they might at least enjoy ample space. But the 1923 colonial was roughly 900 square feet, with three tiny bedrooms and a sliver of backyard — smaller than New York City apartments they had occupied. Furthermore, its previous owner, whom Ms. de Beaufort described as “a DIY guy,” had a fondness for murky colors and copious, awkwardly placed storage nooks.

Posted in Demographics, Economics, New Jersey Real Estate, NYC | 91 Comments

Something’s going to give

From Seeking Alpha:

Mortgage Rates Re-Spike To 7% Range As It Sinks In That Fed Won’t Cut Rates ‘Anytime Soon,’ Mortgage Applications Plunge To 1995 Levels

Spring selling season was a dud. But what comes next may be worse, that’s what mortgage applications and investors tell us

The 7% mortgages are back. The average interest rate on 30-year fixed-rate mortgages with conforming balances jumped to 6.91%, the highest since November, according to the weekly measure by the Mortgage Bankers Association on Wednesday.

The daily measure by Mortgage News Daily already went over 7% a few days last week and earlier this week.

“Inflation is still running too high, and recent economic data is beginning to convince investors that the Federal Reserve will not be cutting rates anytime soon,” is how the Mortgage Bankers Association explained what has been obvious to us here for months.

And so, with these kinds of mortgage rates, spring selling season – the time of the year when sales and prices nearly always rise from the dreary days of the winter – has turned into an amazing dud.

What comes next may get sloppy. Mortgage applications to purchase a home are a forward-looking indicator of where home sales as measured by closed deals are headed in a month or two. The 7% mortgages are indigestible at current home prices – something has to give, and it’s not going to be mortgage rates.

Posted in Economics, Mortgages, National Real Estate | 72 Comments

Musk knows real estate?

From Insider:

Elon Musk warns house prices are set to plunge – and says commercial real estate is in meltdown

Elon Musk is once again ringing the alarm on the US real-estate sector. 

“Commercial real estate is melting down fast. Home values next,” the Tesla and SpaceX chief tweeted on Monday. 

The tech billionaire made the comment in response to a tweet by the Craft Ventures founder David Sacks, who said that a big chunk of commercial real-estate debt was due to mature soon. 

Musk has previously warned that cracks could appear in property markets following turmoil in the banking sector. For example, the clean-energy pioneer said commercial real estate was “by far the most serious looming issue,” and cautioned regional banks could experience a wave of defaults because of their huge exposure to the sector. 

The debt-fueled industry has kept investors on edge in recent months, given that it faces a raft of headwinds. These include higher interest rates, tighter credit conditions, and work-from-home trends. 

JPMorgan estimated that about $450 billion in commercial real-estate debt set to expire this year could default. Meanwhile, Morgan Stanley Wealth Management said commercial-property prices could tumble 40% from their peak in light of the sector’s troubles. 

The US housing market is also dealing with similar problems, which likely explains Musk’s view that prices were set to topple. Morgan Stanley reported that home sales have bottomed as higher borrowing costs crippled demand with experts warning of a potential 15% to 20% plunge in prices.

Posted in Demographics, Economics, National Real Estate | 97 Comments

NJ Shutdown Ahead

From Insider NJ:

Murphy Unlocks the Nuclear Launch Codes

Skipping over the preliminaries — meetings, discussions, negotiations or compromises with legislative leaders — Gov. Phil Murphy went directly to the nuclear option— shutting down state government on July 1 if the Legislature sends him a fiscal 2024 budget that includes extending the corporate tax surcharge to finance a new broad property tax reduction program targeted at senior citizens.

Within 24 hours of Senate President Nick Scutari’s (D-Union) favorable comments in support of a proposal floated by Assembly Speaker Craig Coughlin (D-Middlesex) to target property tax relief to senior citizens, the Murphy Administration — in a rare public outburst of intra-party disagreement — dared the leaders to move ahead against his wishes and risk bringing state government to a halt.

In a stern “don’t call my bluff” warning, the governor said he would veto any budget provisions to continue the five-year-old surcharge and if the Legislature failed to agree by the July 1 constitutional deadline for a new spending plan, government operations would come to a halt.

Driving home his seriousness, Murphy said he’s already ordered contingency plans drawn up for a government shutdown while continuing to provide essential services.

The 2.5 percent surcharge on businesses with over $1 million a year in taxable income will expire at the end of this year and Murphy has made it clear that he stands firm in his view that when it was enacted in 2018 a specific sunset provision was included and government is obligated to abide by it.

Its’ expiration is estimated to result in a loss of $332 million for the remainder of the current fiscal year and $1 billion by fiscal 2025.

While details of Coughlin’s plan are scarce, Murphy criticized it as unfair by singling out a segment of property owners — senior citizens — regardless of financial circumstances and without means testing.

Moreover, the governor has questioned the wisdom of enacting a major multi-billion dollar program at a time of economic uncertainty. Any downturn or revenue loss in the outyears will likely result in scaling back or eliminating the relief program.

Posted in Demographics, New Jersey Real Estate, Politics, Property Taxes | 66 Comments

Sorry about the price of your buildings

From the NY Post:

Remote work is cutting NYC office value by half: Study

Working from home is killing office buildings’ worth. 

As remote and hybrid work prove to be enduring trends, researchers are predicting grim fates for the future value of New York City’s commercial workplaces. 

New York University and Columbia University researchers have updated a 2022 study to reflect new findings that offices will be even more impacted by remote work than they previously calculated. 

“We now estimate a more persistent work-from-home regime, which has more of an impairment of office values even in the long run,” Arpit Gupta, co-author of the study, “Work From Home and the Office Real Estate Apocalypse,” told the Real Deal of the revised projection. 

The revision comes as post-pandemic rates of workers returning to the office appear to have plateaued around 50%, much lower than many expected. 

While last year, in its initial publication, the paper estimated that NYC’s office stock would lose 28% of its pre-pandemic value by 2029, an update this month has significantly upped that number to 44%. 

The appraisal is not unique to New York: “The numbers for NYC are not an outlier; we find similar effects across many of the largest office markets,” the study warns.

Nationwide, they estimate this means a loss of $506.3 billion in value, a shift that has significant repercussions for local public finances. 

Office stock will not feel the impact evenly, though, with higher quality buildings much more buffered than lower quality offices, which will bear the brunt of the devaluation.

The fallout is already visible, with an increasing number of landlords defaulting on loan payments, corporate tenants reconsidering long-term leases and the amount of vacant office space in the US surging, The Post previously reported.

Posted in Demographics, Economics, National Real Estate, New Development, NYC | 35 Comments

Hottest in NJ?

From NJ1015:

These NJ counties have some of the hottest real estate markets

This will come as no surprise to anyone who’s been house shopping in New Jersey for the past few years, but the Garden State is home to some of the hottest real estate markets in the country.

According to, six New Jersey counties are among the hottest 100 in the U.S., based on data for March of this year. They basically look at supply and demand for listed properties, and how quickly they sell.

The six hottest New Jersey counties, with their national rank:

Somerset (#37)

Burlington (#46)

Hunterdon (#48)

Morris (#53)

Camden (#66)

Union (#67)

Houses in these markets often get multiple offers and then sell for more than the list price; and the list prices are pretty high! The median price for a house listed in Somerset is $649k; in Burlington it’s $349,900. In Hunterdon the median list price is $526,500; in Morris, it’s $633,450; for a home in Camden, the median list price is only $278,950 and in Union, it’s $510,625.

Posted in Housing Bubble, New Jersey Real Estate | 182 Comments

Housing market takes a beat down in April

Hat Tip ChiFi! (No, not this post, but the last two).

From CNN:

US home prices fall by most in 11 years but sales are down

US home sales fell in April for the second month in a row and home prices had the biggest drop since 2012, according to a National Association of Realtors report released Thursday.

Sales had shown some life, rising in February after a full year of declines due to surging mortgage rates, but that momentum has since cooled.

In April, sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — dropped 3.4% from March. Annually, sales were down 23% from a year ago and the seasonally adjusted annualized sales pace dropped from 5.57 million units a year ago to 4.28 million in April.

April’s falling sales showed that February’s reversal — which ended the longest streak of month-to-month declining home sales on record, going back to 1999 for all homes — did not take off. Mortgage rates were rising in February and pushing toward 7% in March when many of these April closings went into contract.

“Home sales are bouncing back and forth but remain above recent cyclical lows,” said Lawrence Yun, NAR’s chief economist. “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”

This sales pace is higher than the end of last year, when sales hit a low for this cycle of 4 million units. But the current sales pace is down 33% from the cyclical peak of a 6.34 million unit pace in January 2022.

While all four major regions of the US registered both monthly and annual drops in sales, drops continue to be bigger in areas that are highest cost and saw the biggest run up in prices over the past few years. 

Sales in the Northeast and the Midwest were both down 1.9% from March, while sales in the South decreased 3.4% and sales in the West were down 6.1% from the previous month. On an annual basis, sales in the West are down a whopping 31%.

Posted in General | 84 Comments

Hold on to your wallets…

From the NJ Monitor:

State ‘well prepared’ to handle $2B dip in tax revenue, treasurer says

New Jersey will collect roughly $2 billion less in taxes in the current and coming fiscal years, but the years of booming revenue will let the state weather the shortfall without much trouble, state budget experts told lawmakers Wednesday.

Despite the looming shortfalls, officials said New Jersey is well prepared to meet the funding shortfall, which could do little more than cut the state’s surplus from a healthy $10 billion to a still healthy $8 billion.

“We are well prepared to handle this April surprise,” Treasurer Liz Muoio told the Assembly Budget Committee Wednesday.

The declines are driven mostly by worse-than-expected gross income tax collections in the month of April, when business owners and others who do not pay taxes through regular withholdings typically settle their tax bills with the state.

Muoio attributed the expected drop in income tax collections to poor stock market performance and a significant reduction in state capital gains taxes. That revenue declined by at least 55% — only slightly less than the drops seen after the Great Recession and the burst of the dot-com bubble.

Still, most of the state’s other revenue sources continued to perform at or above expectations, and state revenue in the fiscal year that ends June 30 is still expected to exceed last year’s forecasts.

“This is not the cataclysmic event that it would have been 10 or 20 years ago,” said Thomas Koenig, budget and finance officer with the nonpartisan Office of Legislative Services.

Officials now expect the state to collect roughly $52.8 billion in tax revenue in fiscal year 2023 and fiscal year 2024, which begins July 1.

Posted in Economics, New Jersey Real Estate, Politics | 134 Comments

Time for the middle?

From the NY Times:

Coastal Cities Priced Out Low-Wage Workers. Now College Graduates Are Leaving, Too.

The college graduates who fill white-collar jobs in the San Francisco area began to leave in growing numbers about a decade ago. More and more have moved to other parts of the country — an accelerating outflow of educated workers that, in a poorer part of America, might be thought of as brain drain.

A chart showing net domestic migration of college-educated working-age adults in the Washington, D.C., metro area, going from a peak annual gain of over 20,000 people in 2011 to a loss of roughly 15,000 people in 2021.

This pattern, visible in an Upshot analysis of census microdata, is startling in retrospect. Major coastal metros have been hubs of the kind of educated workers coveted most by high-powered employers and economic development officials. Economists have lamented the growing coastal concentration of their wealth. A politics of resentment in America has fed on it, too. These urban centers have become a class of their own — “superstar cities” — with outsize impact on the American economy fueled by the clustering of workers with degrees.

But it appears in domestic migration data that, years after lower-wage residents have been priced out of expensive coastal metros, higher-paid workers are now turning away from them, too.

Working-age Americans with a degree are still flowing into these regions from other parts of the country, often in large numbers. But as the pool leaving grows faster, that educational advantage is eroding. Boston’s pull with college graduates has weakened. Seattle’s edge vanished during the pandemic. And the analysis shows San Francisco, San Jose, Los Angeles and Washington all crossing a significant threshold: More college-educated workers left than moved in.

For most of this century, large metros with a million residents or more have received all of the net gains from college-educated workers migrating around the country, at the expense of smaller places. But among those large urban areas, the dozen metros with the highest living costs — nearly all of them coastal — have had a uniquely bifurcated migration pattern: As they saw net gains from college graduates, they lost large numbers of workers without degrees.

At least, that was true until recently. Now, large, expensive metros are shedding both kinds of workers.

Posted in Demographics, Economics, Employment, National Real Estate | 103 Comments

Does anyone still work in NYC?

From the NY Post:

New Jersey Gov. Phil Murphy attempts to woo New Yorkers in retaliation for congestion tax

The grass is greener in the Garden State? New Jersey Gov. Phil Murphy sure wants you to think so!

Murphy is taking aim at neighboring Gov. Kathy Hochul over New York’s congestion pricing program — with an ad campaign aimed at wooing Big Apple residents and businesses into relocating to his state, The Post has learned.

“New York’s congestion tax scheme is unfair for North Jersey commuters who already pay so much in tolls and fees,” Murphy said in a statement, referring to the Metropolitan Transportation Authority‘s controversial higher “congestion tax” that Jerseyans would have to pay to enter Midtown Manhattan.

“At the same time, it presents an opportunity for us to stress the value proposition of New Jersey for New York City residents and businesses alike: an ideal location, talented pool of workers, less congestion, and, most importantly, no congestion tax. I’m out there every day making the argument for why businesses should give New Jersey a close look for relocation.”

Starting Monday, Choose NJ — New Jersey’s not-for-profit economic development arm allied with Murphy — will run digital ads at key strategic crossings on the New York side of the Hudson entering or leaving Manhattan.

Posted in Demographics, Economics, Gold Coast, New Jersey Real Estate, NYC | 52 Comments

Where’s the top?

From US News:

New Jersey Housing Market Forecast

Buyer demand in New Jersey remains strong, says LaRue. But higher borrowing rates have had an impact on buyer demand.

“Two years ago, people were paying over $100,000 over asking,” says LaRue, referring to a typical home in her market. “Now, you’re maybe getting a little bit over.”

That said, homes that are coming on the market that are more updated and located in nicer neighborhoods are seeing more offers and being sold for top dollar, LaRue says. Homes that aren’t as updated and on busier streets aren’t getting as many offers – but they’re getting offers nonetheless.

In March 2023, the median home price in New Jersey was $660,000, according to Redfin data, marking a 2.2% decrease year over year. On a national level, the median home price in March 2023 was $401,000, down 2.4% from a year prior.

Not only are New Jersey’s home prices higher than the national average, but the state has the dubious distinction of having the highest property taxes in the nation. In 2022, the average New Jersey property tax bill rose to $9,490. But those higher housing prices and taxes are commonly offset by a higher earnings potential.

“Not many people would choose to spend this much money on property taxes unless there were some sort of benefit to their income,” LaRue says.

LaRue says that when buyer demand was at its peak, bidding wars would commonly drive New Jersey home prices upward. These days, she’s still seeing bidding wars, particularly for homes that are the most desirable. These includes homes with expansive backyards and those that allow for multigenerational living. But bidding wars have slowed down quite a bit, especially for average properties.

Even New Jersey beach homes – a usually hot commodity – are seeing sellers who are open to negotiation, says LaRue. “Today’s mortgage rates are keeping buyers a little more conservative in their offers,” she says.

Meanwhile, in March 2023, the median rent price in New Jersey was $3,156, an increase of 7.5% year over year. On a national level, the median rent price in March 2023 was $1,996, up 4.7% year over year.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 59 Comments

Why would they?

From the WSJ:

The Home Buyer’s Quandary: Nobody’s Selling

Many Americans who want to move are trapped in their homes—locked in by low interest rates they can’t afford to give up

These “golden handcuffs” are keeping the supply of homes for sale unusually low and making the market more competitive and pricey than some forecasters expected.  

The reluctance of homeowners to sell differentiates the current housing market from past downturns and could keep home prices from falling significantly on a national basis, economists say. This could dull the Federal Reserve’s efforts to slow inflation by cooling the economy.

Emily and Isaac Naatz of Cottage Grove, Minn, a suburb of St. Paul, had a baby last year and want a bigger place. They have lived for more than four years in their two-bedroom townhouse, and they now want a three- or four-bedroom house with a yard and space for a home office. “You get four people in here…and it feels like a large crowd,” Mr. Naatz said.

But they locked in a 30-year fixed mortgage rate of 3.4% in 2021—and don’t want to give that up to take on a new mortgage with a rate about 3 percentage points higher, especially when home prices in their area haven’t come down much.

The type of home they would want to buy would cost them about $1,100 a month more than they currently pay, Mr. Naatz said. “I don’t feel comfortable paying what I still think is an inflated price for a home, and on top of it paying twice the interest rate,” he said.

As of March 31, nearly two-thirds of primary mortgages had an interest rate below 4%, according to mortgage-data firm Black Knight. About 73% of primary mortgages have fixed rates for 30 years, Black Knight data show. The average rate for a new 30-year fixed mortgage was 6.39% in the week ended May 4, according to Freddie Mac.  

The mortgage-rate factor is leaving some people in houses that aren’t a good fit, whether it’s a growing family without enough bedrooms or aging homeowners with too much space, or dissuading people from relocating for jobs or other opportunities. Some people that wanted to sell in 2022 or 2023 shelved their plans. 

\As current homeowners stay put, “the movement up the ladder is sort of grinding to a halt,” said Sam Khater, chief economist at Freddie Mac. “It’s getting much harder for first-time home buyers to jump into the market because of the lack of supply.”

Posted in Demographics, Economics, Mortgages, National Real Estate | 140 Comments