From The Real Deal · Jonathan Miller · · 1m 30s
Housing Prices Shift Amid Procrastination
Existing homes beat new homes in price as buyers and sellers delay adjusting to rising rates.
In brief
Existing homes beat new homes in price as buyers and sellers delay adjusting to rising rates. Existing home prices rose 1.7% to $435,700 while new home prices fell 1.3% to $410,700 amid buyer and seller procrastination on rate changes. Originally reported by The Real Deal.
Existing homes outperform new homes
Existing home prices rose 1.7 percent yearly to $435,700, beating new home prices at $410,700.
Housing affordability focus on existing stock
Existing homes make up about 90 percent of the housing inventory, so they are key to improving affordability.
Acclimation procrastination explained
Buyers and sellers delay adjusting to rising rates, waiting for conditions to return to past levels.
Procrastination period in housing market
The gap between rate shocks and final acceptance takes time, causing sales to remain weak.
Buyers delay search for 13 months
About 72 percent of prospective buyers delayed their search, averaging 13 months, waiting for lower rates.
Sellers take 12-18 months to adjust
Sellers take 12 to 18 months to adjust to market changes before feeling they left money on the closing table.
Builders respond quickly to rate changes
Builders cut prices and buy down mortgage rates to keep homes moving as unsold houses cost money.
Real gap in pricing is wider than 6 percent
The actual price gap is probably wider than 6 percent because buyers shop by monthly payment.
The bottom line
Existing home prices rose 1.7% to $435,700 while new home prices fell 1.3% to $410,700 amid buyer and seller procrastination on rate changes.
