Mortgage Rates Again Near 7%:  The 30-year fixed-rate mortgage rose to 6.79% in the first days of June, forcing more home buyers to recalculate their budget. Mortgage applications for home purchases are falling—down 31% year over year, according to the Mortgage Bankers Association. But economists say mortgage rates are likely to drop in upcoming weeks, which could help alleviate some of the affordability pressure on home buyers.  In fact, by June 15^th, they were down to 6.69%.  At rates approaching 7%, nearly 5.5 million more households are priced out of the housing market than a year ago.  Though even with fewer buyers, more than one-third of properties are sold above list price due to limited inventory. NAR has been predicting rates to stabilize near 6% in the second half of the year.

What Fed’s Pause On Rate Hikes Means For Home Buyers:  Ending a cycle of 15 months of rate hikes, the Federal Reserve voted this week to hold off on another increase to its key short-term interest rate. The news fueled hopes that borrowing costs for home buyers could cool in the coming weeks, but only if the Fed continues to pause rate hikes. Mortgage rates are not directly tied to the Fed’s benchmark rate but are often influenced by it.  They are more closely tied to the 10-year Treasury bond, which responded this week to better inflation news with a rate decline to 3.7%.  When combined with the decline in the inflation rate to about 4% in May, many predict lower mortgage rates to follow. 

Middle-Income Buyers Suffer Most In Housing Shortage:  The national housing shortage is most acute in price points that middle-income buyers can afford, according to new National Association of REALTORS® data. The market is short about 320,000 listings worth up to $256,000—which is considered the affordability range for households earning up to $75,000 annually, according to the Housing Affordability & Supply Report.  Due to the pronounced inventory squeeze in these price points, middle-income buyers may find the steepest competition when shopping for homes. And as a result, these buyers may find it even harder to build wealth through homeownership.  Middle-income buyers overall can afford to purchase less than a quarter—or 23%—of listings nationwide, the report shows. Five years ago, middle-income buyers could afford half of all homes on the market.

Boomers And Millennials Fight For Homes As Housing Market Cools:  Prices have cooled in the once red-hot housing market, but competition is heating up between two generations in seemingly perpetual conflict.  Millennials entering their prime homebuying years and baby boomers are vying for the same homes.  But most boomers have a key advantage: substantial equity from previous home purchases and higher incomes, which help them avoid the growing costs of a long-term mortgage.  Buyers in the baby boomer generation were largely repeat buyers last year, meaning they already had equity from previous homes to boost their purchasing power. Half of Older Boomers and one-third of Younger Boomers paid all cash allowing them to more easily make housing trades and win any multiple-bid situations.

Home Features Young Buyers Care About:  First-time homebuyers, consisting of elder and younger millennials and Gen-Z generations make up about 1/4 of the home-buying market.  This younger generation of home buyers have specific features from the homes they seek.  Smart Home Technology, such as thermostats, doorbells, cameras and keyless entries are a top priority.  Livable Outdoor Spaces, such as gardens, backyards and outdoor cooking areas are in high demand.  Home Offices have significant appeal to young buyers.  Spacious Bathrooms are in high demand, especially as rising home cost force some buyers to settle for smaller living spaces.  Luxurious Laundry Rooms with high-quality washer/dryers, built-in storage and counter space. Ample Storage Areas or dedicated on-site storage unit, well organized with shelving and space.