July Purchase Forecast Update
Lumber prices continue to fall from the peak. From a level of about $400 per thousand board feet, prices quadrupled to more than $1700 per thousand board feet in FOMO buying panic. Since the peak around 60 days ago, approximately 80% to 85% of the increase in lumber prices has evaporated. Prices of other materials such as copper (wiring and plumbing – up about 60%) and sheetrock (walls) are still well above their lows. But they also have seen a retreat in prices. While some materials prices still remain high historically, they are falling rapidly and builders have managed inventory deliveries to minimize the impact. Look for the trend to continue to soften into the fall and winter. Our July purchase forecast update maintains the prior forecasted buying window. How’s your budget? Got your loan research completed with Winning Mortgage, Winning Home?
Buyer Remorse and Bidder Fatigue
As predicted in our forecast from the spring and recent updates, home buyers and bidders have begun having second thoughts. Recent reports from June show bidding wars fell about 10%. June sales volume fell from May to June by 1.2%, the largest amount at this time of year since 2012. In addition, top buyers have begun bailing on the contracts. Backup bidders in second, third or other places found opportunity when the original buyer(s) backed out of the purchase. Buyer fatigue is likely one factor pushing down the competition rate. Many house hunters moved to the sidelines after losing bidding wars. With buyers starting to get cold feet, the lower priced houses in desirable areas command more competitive interest than other segments.
The July purchase forecast update provides insight into only a few of the factors which continue to move in the right direction. Interest rates, housing supply and other factors also continue to move in the predicted direction. Keep up to date here. But most of all, follow the recommendations in the book to be the best prepared for opportunity!
Bad Time to Buy a Home?
