The affordability index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels, based on the most recent price and income data. Interest rates have jumped from three and a half percent to almost five and a half percent, pricing millions out of the housing market. This leap has also impacted the refi industry, as many find the new mortgage rates prohibitive.

The acceleration of the housing price increase has diminished. In many markets in the western part of the US, there has been significant growth in the number of houses available compared to the same time last year. When the Fed raised the short-term borrowing rates to combat inflation, it also impacted the mortgage interest rates, causing the market to cool. If there’s a cooling in the housing market, fewer people want to buy because it’s too expensive, more take their money out of the market, and there are fewer houses available. The reaction is more sellers find they are having difficulty attracting buyers, so prices lower again, and more properties are on the market. Conversely, there is an upsurge in affordability as well, so if potential buyers can hang on until the fall once the housing season is over, families have gotten their kids settled into school and are less inclined to move before the holidays, there will likely be a boost in housing and a dip in inflation, thus increasing the opportunities of finding that new home. Jeff’s guests include:

– Kim Soash (Homebridge) talks about non-QM loans and the jump in rates for non-owner occupied homes.

– Charles Giscombe (Malibu Funding) explains shadow inventory.

– Joann Munz (Real Estate Barbie) discusses higher rental prices and homebuyers leaving California for the Las Vegas market.