-Even with the mortgage-rate surge, houses for sale remain in short supply in cities and towns:  In a housing market full of contradictions, anxious buyers and sellers are finding one constant: Despite rising rates, inflation, and economic uncertainty, there still aren’t enough homes to meet demand, particularly in suburban and exurban areas surrounding big cities like New York and Chicago.   Housing listings are still down 29% nationwide in the five years ending in October.  Economists’ and policy experts’ estimates of the nation’s total housing shortage still range from 1 million to more than 5 million homes.   That means that buyers who can stomach today’s mortgage rates and manage to find a home that fits their criteria still in many cases have to move fast and contend with competing offers.   The housing shortage is also complicating efforts by Federal Reserve officials to broadly fight inflation. In 2022, the U.S. central bank boosted interest rates at the fastest pace in decades to bring inflation down from 40-year highs. Housing is a key inflation driver and the lack of housing supply is making it harder for the policymakers to bring rising prices under control.   Many would-be sellers are backing away from listing their homes when they weigh the benefits of keeping their current low-rate mortgages–amplifying the inventory crunch.

-Economist: Mortgage Rates Will Dip Below 6% Soon:  Mortgage rates likely will settle below 6% and experience less volatility this year, predicts Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®. But we’re not there yet: The 30-year fixed-rate mortgage averaged 6.48% this week, according to Freddie Mac. Homeownership has become nearly 10% more affordable in this time as rates have eased. The average monthly mortgage payment for a median-priced home has fallen to $2,140.  “Although rates remain more than double a year ago, they will likely stabilize as inflation will continue to slow down in the coming months,” Evangelou says.  Mortgage rates have been pulling back ever since surging to a 7.08% average in November. But the housing market may still be adjusting to higher rates.  Mortgage application activity sunk to a quarter-century low this week as high mortgage rates continue to weaken the housing market.  While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.  Affordability has been hammered by higher rates in recent months. Evangelou says the qualifying income for homeownership is now near the $100,000 threshold, which means only 32% of all households and 15% of all renters can afford to buy a median-priced home.   Home buyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large number of millennial renters will provide support to the purchase market.

-21 Real Estate Wins in Government Spending Package:  Congress gave final approval Friday to a bipartisan bill to fund the government through Sept. 30, 2023, clearing the last major piece of legislation for the year. The bill now goes to President Joe Biden for his signature. Included in the bill are an extension of the National Flood Insurance Program (NFIP) through Sept. 30 and a host of other housing programs supported by the National Association of REALTORS®.  Items supported by NAR include:  Community development funding, Disaster assistance, Elderly housing assistance, Infrastructure, Native community housing, Rural housing, Veteran housing and others.