Freedom Financial

Here's your weekly look at the markets!

I have been hearing how the housing price increases are unsustainable. Prices are rising around 5% per year +/-. In order for the price increases to be sustainable people's income must be rising, AND RISING IT IS! Below are the statistics from last week's monthly jobs report. Yes, the economy is producing jobs, but more than that, wages are rising strongly. The average hourly earnings rose by 4.46%, but more importantly, the average weekly earnings (the true measure of what a person is making) rose by an amazing 5.68%. These kinds of increases make the housing affordability sustainable and allows for the the prices to continue to moderately increase over time.

Existing Home Sales Existing Home Sales report for May, which measures closings in that month and likely represents buyers shopping for homes in March and April, decreased by 9.7%. This was slightly worse than the 8.8% expected. Sales are down 26.6% year over year. Inventory remained tight - There were only 1.55 M units for sale in May, down 18.8% year over year, but up 6.2% from April. At the current pace of sales this represents a 4.8-month supply. This should be very suppo...rtive of prices, especially with demand remaining strong evidenced by purchase application volume. The median home price was reported at $284,600, up 2.3% year over year. Single family sales were down 9.4% month over month, but Condo’s saw a much bigger drop of 12.8%. They are down 41% year over year, showing that people are looking for standalone homes. First time home buyers made up 34% of home sales. In the middle of quarantine and the Pandemic we find that fewer people wanted people going through their homes, so they opted to not market their homes and hence fewer homes on the market. There is still a strong demand for housing, especially suburban single-family homes.

Ever wondered what your home might really be worth? Ever wondered what you might be able to do with the equity in your home? Check it out.