come back to cheddar News is closing bell. Everyone
christian shola here with ken buffa. Alright, Kristen
in more headlines ever watching believe it or not,
there's more headlines zeroing in on the housing market after
Federal Reserve Chair jerome Powell acknowledged that activity in the
housing sector is softening his comment followed the announcement that
the Fed is raising interest rates by three quarters of
a percent as a way to fight inflation. As
for the housing market, there is data to prove
Powell's point. So demand for new home mortgages is
about half of what it was this time a year
ago. One measure finds that total mortgage application volume
was down more than 50% last week. Potential buyers
are being turned off from the market for several key
reasons. Home prices are rising since there is a
lower supply of available homes for sale group that,
together with higher interest rates, which means higher costs
to borrow money to buy an already expensive home rising
rates also means fewer people are refinancing homes. They
already have. Most people who currently have a mortgage
have a rate lower than the current rate. I
know I do, and the average rate for a
30 year fixed mortgage is now above 6% according to
mortgage News daily. So the average was about 5.5%
. Just a week ago, while mortgage demand is
down big time, the National Association of Realtors finds
home sales overall are down as well and have been
for six straight months, largely attributed to all of
these factors. That is right. So getting a
mortgage is more expensive. Like we've said millions of
times on this show, Kristin money is not cheap
and if you can't afford a mortgage, but you
can't afford the home, you still can't get that
home. It is tricky. Obviously, mortgage rates
soaring, making housing less affordable, ken, as
you and I have been covering for months, but
I expect these rates to actually continue to rise and
probably demand then to dwindle even more because the Fed
announcing today, it's raising rates by 75 basis points
and laying the groundwork for a potential one more 75
basis point rate rise come the end of july.
So that directly impacts these mortgage rates as it has
all year. And clearly, the Fed chair,
Jerome Powell, starting to see a slowdown in housing
as well, noting that housing, fixed business investment
, all of these factors are starting to slow your
right as money becomes more expensive. Okay, let's
stick with housing here, builders are growing pessimistic about
the housing market and sentiment among the nation's homebuilders falling
for the sixth straight month to its lowest point in
two years. But still, while the home builders
, Wells Fargo housing market index fell to 67 points
, anything above 50 is considered positive. So the
chair of that organization saying the declining attitude is because
of the high inflation and slow growth environment, And
meanwhile, us home equity has hit its highest level
on record with a staggering$27.8 trillion. It increased
almost 20% just in the first quarter, according to
the Federal Reserve and it's a$4.6 trillion dollar spike
. Well, it's one of the symptoms of rising
housing costs that is making it difficult for first time
homebuyers, but it's benefiting the net worth of those
who already own a home. So we've seen ken
a dwindling equity and net worth in the stock market
this year. At the same time as equity in
homes has increased because of the soaring prices. And
the sentiment obviously is falling because folks aren't trying to
I guess buy as many homes, but lumber prices
are down, but prices on other materials are still
up and when it comes to equity. Yeah,
we have all this equity your house probably boosted in
price but try to tap into that you're facing huge
huge percentage when it comes to those rates. And
that's it's like having all this candy in the candy
store, but you're allergic, you just can't do 00:03:44.490 --> anything