The FBI completed a search of President Joe Biden’s Rehoboth Beach, Delaware, home and no documents with classified markings were found, Biden’s personal attorney said Wednesday.
Bob Bauer, Biden’s attorney, did say the FBI took with them handwritten notes and some materials for further review. The search took three-and-a-half hours.
“The DOJ’s planned search of the President’s Rehoboth residences, conducted in coordination and cooperation with the President’s attorneys, has concluded,” Bauer said. “The search was conducted from 8:30 AM to noon.”
“No documents with classified markings were found,” he said.
Bauer said that like last month’s search of Biden’s home in Wilmington, Delaware, agents “took for further review some materials and handwritten notes that appear to relate to his time as Vice President.”
Bauer confirmed earlier in the morning that investigators were searching the home. The search was planned and had the “full support and cooperation” of Biden, Bauer said.
“Under DOJ’s standard procedures, in the interests of operational security and integrity, it sought to do this work without advance public notice, and we agreed to cooperate,” Bauer said. “The search today is a further step in a thorough and timely DOJ process we will continue to fully support and facilitate. We will have further information at the conclusion of today’s search.”
Reporters positioned in the coastal community observed black sport utility vehicles and sedans arriving to the home mid-morning.
Biden’s personal attorneys previously searched the Rehoboth home on January 11 and found no classified documents.
The FBI search in Rehoboth marks the third known occasion that federal agents have searched properties associated with Biden to look for classified material.
The FBI previously searched Biden’s home in Wilmington, Delaware, turning up what his lawyer described as multiple items containing classified material. That search occurred on January 20. Biden’s attorneys had previously found documents at the Wilmington home and suspended their search of a specific space where additional documents were found. It’s not clear whether the documents the FBI found were in that same space or elsewhere in the house.
The FBI also searched the Washington office of the Penn Biden Center in mid-November after Biden’s attorneys first discovered classified material in a locked closet at the think tank.
None of the searches, including Wednesday’s in Rehoboth, required a warrant, according to people familiar with the matter. Biden’s team has stressed they are cooperating with the Justice Department as its probe of the documents matter proceeds.
Biden purchased his home in Rehoboth after leaving the vice presidency. He and his wife occasionally spend weekends there, most recently from January 20 to 23.
The search comes on the day that the Justice Department announced special counsel Robert Hur officially began his job overseeing the investigation of Biden’s handling of classified documents. Hur takes over for US Attorney John Lausch who conducted an initial review that has since become a full blown criminal investigation.
Hur, who previously served as US attorney in Maryland, was nominated to that position by then-President Donald Trump in 2017. He served in the role until his resignation in 2021. In the job, Hur played a key role in a number of high-profile cases, including a children’s book scandal involving then-Baltimore Mayor Catherine Pugh that resulted in Pugh being sentenced to three years in prison.
He was unanimously confirmed by the Senate to the US attorney job in 2018, and at the time he received praise from both of Maryland’s Democratic senators, who expressed confidence in his ability to handle critical issues facing the state.
Prior to his time with the DOJ, Hur was a law clerk for Chief Justice William Rehnquist and also clerked for a federal appellate judge, Alex Kozinski.
This story has been updated with additional reporting.
Mortgage rates dropped again this week, after plunging nearly half a percentage point last week.
The 30-year fixed-rate mortgage averaged 6.58% in the week ending November 23, down from 6.61% the week before, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.10%.
Mortgage rates have risen throughout most of 2022, spurred by the Federal Reserve’s unprecedented campaign of hiking interest rates in order to tame soaring inflation. But last week, rates tumbled amid reports that indicated inflation may have finally reached its peak.
“This volatility is making it difficult for potential homebuyers to know when to get into the market, and that is reflected in the latest data which shows existing home sales slowing across all price points,” said Sam Khater, Freddie Mac’s chief economist.
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey only includes borrowers who put 20% down and have excellent credit. But many buyers who put down less money upfront or have less than perfect credit will pay more than the average rate.
The average weekly rates, typically released by Freddie Mac on Thursday, are being released a day early due to the Thanksgiving holiday.
Mortgage rates tend to track the yield on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they make moves which send yields higher and mortgage rates rise.
The 10-year Treasury has been hovering in a lower range of 3.7% to 3.85% since a pair of inflation reports indicating prices rose at a slower pace than expected in October were released almost two weeks ago. That has led to a big reset in investors’ expectations about future interest rate hikes, said Danielle Hale, Realtor.com’s chief economist. Prior to that, the 10-year Treasury had risen above 4.2%.
However, the market may be a bit too quick to celebrate the improvement in inflation, she said.
At the Fed’s November meeting, chairman Jerome Powell pointed to the need for ongoing rate hikes to tame inflation.
“This could mean that mortgage rates may climb again, and that risk goes up if next month’s inflation reading comes in on the higher side,” Hale said.
While it’s difficult to time the market in order to get a low mortgage rate, plenty of would-be homebuyers are seeing a window of opportunity.
“Following generally higher mortgage rates throughout the course of 2022, the recent swing in buyers’ favor is welcome and could save the buyer of a median-priced home more than $100 per month relative to what they would have paid when rates were above 7% just two weeks ago,” said Hale.
As a result of the drop in mortgage rates, both purchase and refinance applications picked up slightly last week. But refinance activity is still more than 80% below last year’s pace when rates were around 3%, according to the Mortgage Bankers Association weekly report.
However, with week-to-week swings in mortgage rates averaging nearly three times those seen in a typical year and home prices still historically high, many potential shoppers have pulled back, said Hale.
“A long-term housing shortage is keeping home prices high, even as the number of homes on the market for sale has increased, and buyers and sellers may find it more challenging to align expectations on price,” she said.
In a separate report released Wednesday, the US Department of Housing and Urban Development and the US Census Bureau reported that new home sales jumped in October, rising 7.5% from September, but were down 5.8% from a year ago.
While that was higher than predicted and bucked a trend of recently falling sales, it’s still below a year ago. Home building has been historically low for a decade and builders have been pulling back as the housing market shows signs of slowing.
“New home sales beat expectations, but a reversal of the general downward trend is doubtful for now given high mortgage rates and builder pessimism,” said Robert Frick, corporate economist at Navy Federal Credit Union.
Despite a general trend of falling sales, prices of new homes remain at record highs.
The median price for a newly constructed home was $493,000 up 15%, from a year ago – the highest price on record.
Home sales in the United States declined for the ninth month in a row in October as surging mortgage rates and high prices pushed buyers out of the market.
Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were down 28.4% in October from a year ago and down 5.9% from September, according to a National Association of Realtors report released Friday.All regions of the United States saw month-over-month and year-over-year declines.
That continues a slowing trend that began in February and marks the longest streak of declining sales on record, going back to 1999.
Sales in October were at their weakest level since May 2020, when the real estate market was at a standstill during the pandemic lockdowns. Beyond that, sales last month were the weakest they have been since December 2011.
Still, home prices continued to climb last month. The median home price was $379,100 in October, up 6.6% from one year ago, according to the report. But that’s down from the record high of $413,800 in June. The price increase marks more than a decade of year-over-year monthly gains.
“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” said Lawrence Yun, NAR’s chief economist. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”
Many homeowners who recently bought or refinanced into ultra-low mortgage rates are reluctant to sell. That has kept inventory painfully low.
At the end of October there were 1.22 million units for sale, down less than 1% from both last month and last year, according to the report. At the current sales pace, it would take 3.3 months to get through the existing inventory, up from 3.1 months in September and 2.4 months last year. But that’s still historically low: A balanced market is a 4 to 6 month supply.
“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added.
While nearly a quarter of homes in October sold over the asking price, homes sitting on the market for more than 120 days saw prices reduced by about 16%.
With fewer buyers shopping for homes, the average time a home stays on the market is getting longer.
Properties were typically on the market for 21 days in October, up from 19 days in September. Pre-pandemic, homes typically sat on the market closer to 30 days. Over half the homes sold in October were on the market for less than a month.
While prices are still climbing year over year nationally, the increase is smaller than it has been over the past couple years with annual home price appreciation peaking at 24% in May 2021.
And some markets are even seeing prices drop, especially areas that saw a huge increase in home price appreciation during the pandemic, Yun said.
Half the country can expect to see prices decline year over year in the months ahead, Yun said, most will be by a modest amount, while other areas will see bigger drops. But the other half will likely see a modest increase.
“Affordable areas will hold on, places like Indianapolis, where there is job growth,” he said.
Still, Yun said, nationally, home prices are 40% higher than in October 2019, prior to the pandemic.
“Household incomes have not risen by 40%,” he said.
Those struggling to buy their first home continued to be shut out, making up only 28% of transactions last month.
“First-time buyers are really struggling with high prices, the high bar to get into the market and high mortgage rates.”
Once the hurdle to homeownership improves a bit for buyers — either with falling prices or lower mortgage rates — we could again face a housing shortage, Yun said, because the number of fresh listings coming to market is lower now than a year ago.
Current homeowners aren’t selling and homebuilders are slowing home construction, too.
October housing starts, a measure of new home construction, dropped 4.2% from September, and were down 8.8% from a year ago, according to the US Census Bureau and the US Department of Housing and Urban Development.
“This is why more new home construction is needed, as well as more rehabilitation of disused buildings into residential units,” said Yun, noting that while construction of apartment buildings remains robust, single-family starts are below one year ago and well below historical averages.
“In the meantime, mortgage rates are falling from the peak levels of last month and the gate is opening for more homebuyers to qualify for a mortgage.”
The US housing market is in the midst of a major shift. After two years of stratospheric price appreciation, home prices have peaked and are on their way back down.
But what homebuyers and homeowners alike want to know is: How much lower will prices go?
The short answer: Prices are likely to drop further, but not by as much as they did during the housing bust. From the 2006 peak to the 2012 trough, national home prices fell by 27%, according to S&P CoreLogic Case-Shiller Indices, which measures US home prices.
“It was different in 2008, 2009 because that drop in prices was because of a push from sellers,” said Jeff Tucker, senior economist at Zillow. “Because of foreclosures and short sales there were a lot of extremely motivated sellers who were willing to take a loss on their homes.”
Plus, that housing crash came at a time when the inventory of homes for sale was four times higher than it is now. Current inventory is still substantially lower than pre-pandemic levels, which has increased competition for homes. And that is keeping prices relatively strong.
“I would be surprised to see prices anywhere drop below where they were in 2019,” said Tucker. “There was some overheating in the housing market in 2021 through this spring that pushed prices higher than what the fundamentals would support. Now they are coming down.”
With mortgage rates more than doubling since the start of this year, the calculations for a homebuyer have changed considerably. The monthly principal and interest mortgage payment on the median priced home is up $930 from a year ago, a 73% increase, according to Black Knight, a mortgage data company.
When you factor in soaring mortgage rates, along with elevated home prices and wages that aren’t increasing as fast, buying a home is less affordable now than it has been in decades, according to Black Knight.
But there may be some relief in sight for buyers.
Economists at Goldman Sachs expect home prices to decline by around 5% to 10% from the peak hit in June.
Wells Fargo has recently forecasted that national median single-family home prices will drop by 5.5% year-over-year by the end of 2023.
Wells Fargo’s economists estimate that the median price for an existing single family home to be $385,000 this year, up 7.8% from last year, but the growth will be a lot less than the 19% year-over-year increase seen in 2021.
The economists anticipate the median home price will fall to $364,000, a decline of 5.5% from this year. They predict prices will rebound and rise again in 2024, with the median price ticking up 3.3% to 376,000 by the end of 2024.
“The primary driver behind the housing market correction thus far has been sharply higher mortgage rates,” the Wells Fargo researchers wrote. “If our forecast for Fed rate cuts is realized, mortgage rates are likely to fall slightly just as cooling inflation pressures boost real income growth. A modest improvement in sales activity should then follow, which will reignite home price appreciation heading into 2024.”
Ultimately, how much prices fall will depend on where you live.
Unlike the run-up in prices during the pandemic that caused home values in markets across the country to surge, the cooling off will be more regional, said Tucker. The drops will be more deeply felt in places where there were larger gains during the pandemic, many of them in the West and Sunbelt, including cities like Austin, Phoenix and Boise, he said.
“Nationally, we might see a 5% decline from the peak,” Tucker said. “But prices will decline by more in the West and there will be a smaller decline in the Southeast.”
In September, month-over-month home prices dropped in several pandemic hotspots, including Phoenix, down 2.3%; Las Vegas, down 1.9% and Austin, down nearly 1%, according to Zillow.
And Boise, Idaho, where prices surged nearly 60% during the pandemic, is already seeing annual declines, with prices falling 3.9% year over year in September, according to Zillow.
“A number of metro areas, especially in the West, will see some year-over-year price declines this spring,” said Tucker. “That will be the worst comparison time because that’s when many markets reached their peak.”
Editor’s Note: Affected by the storm? Use CNN’s lite site for low bandwidth. You also can text or WhatsApp your Ian stories to CNN +1 332-261-0775.
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Hurricane Ian – now a stronger and “extremely dangerous” Category 4 storm – has begun lashing Florida with major flooding and ruinous winds as it advances on a large swath of the state’s west coast with the potential within hours to inflict catastrophic floods and life-threatening storm surge.
“Conditions rapidly deteriorating along the southwest Florida coast,” the National Hurricane Center said Wednesday morning, with Ian’s center just 55 miles from the coast. Its maximum sustained winds were 155 mph – just 2 mph short of a Category 5, the center said at 7 a.m. ET.
The area between Naples and Sarasota faces the highest threat of dangerous storm surge, the hurricane center said. More than 2.5 million people have been advised to flee, including 1.75 million under mandatory evacuation orders – no small ask in a state with a large elderly population, some of whom have to be moved from long-term care centers.
After pummeling Cuba on Tuesday and leaving an islandwide blackout, Ian is taking aim at Florida’s vulnerable Gulf Coast, where residents have been boarding up and leaving in droves on congested highways. Schools, supermarkets, theme parks, hospitals and airports have announced closures. The Navy moved its ships, and the Coast Guard has shut down ports.
Parts of far southern Florida already have begun feeling the storm’s first effects, with tropical storm-force winds and at least two possible tornadoes reported in Broward County, including at North Perry Airport, where planes and hangers were damaged. Major flooding was being reported in Key West due to storm surge, along with power outages.
“The time to evacuate is now,” Florida Division of Emergency Management Director Kevin Guthrie said Tuesday, calling Ian “a statewide event.”
As winds pick up, officials may close bridges, complicating evacuations for those who don’t leave right away. Gas stations may also temporarily run out of fuel, Gov. Ron DeSantis said.
Water levels already were hitting about 2.5 feet above Mean Higher High Water – the third highest level behind 2005’s Hurricane Wilma and 2017’s Hurricane Irma, CNN Meteorologist Robert Shackelford said.
A hurricane warning is in effect on Florida’s Gulf Coast from Chokoloskee to the Anclote River, including Tampa Bay, and in the Dry Tortugas. A storm surge warning is in effect for coastal areas, including Tampa Bay.
In Tampa, police went door to door Tuesday in a mandatory evacuation zone, making sure residents are ready to flee.
Projections earlier had Hurricane Ian on track to directly hit Tampa Bay, which would have been the first direct hit in 100 years. While the hurricane’s path has shifted south, Tampa Mayor Jane Castor said mandatory evacuations and preparations are continuing.
“No matter where it lands, if it does come in a little south of us, we are not getting out of this unscathed and there is going to be flooding throughout the Tampa Bay area,” Castor said.
The governor warned there will be “catastrophic” flooding and life-threatening storm surge in the Gulf Coast region, with the highest risk in southwest Florida, from Naples to Sarasota.
Photos: Hurricane Ian threatens Florida
Chris O’Meara/AP
Workers board up the windows on the University of Tampa campus ahead of Hurricane Ian on Tuesday, September 27.
Photos: Hurricane Ian threatens Florida
Ramon Espinosa/AP
People play dominoes by flashlight during a blackout in Havana, Cuba, on Wednesday, September 28. Crews in Cuba are working to restore power for millions Wednesday after the storm battered the western region with high winds and dangerous storm surge, causing an island-wide blackout.
Photos: Hurricane Ian threatens Florida
Yamil Lage/AFP/Getty Images
People walk through a flooded street in Batabano, Cuba, on Tuesday.
Photos: Hurricane Ian threatens Florida
Chris O’Meara/AP
Southwest Airlines passengers check in near a sign that shows canceled flights at the Tampa International Airport on Tuesday.
Photos: Hurricane Ian threatens Florida
Rob O’Neal/The Key West Citizen/AP
News crews, tourists and local residents take images Tuesday as high waves crash into a seawall in Key West, Florida.
Photos: Hurricane Ian threatens Florida
Ramon Espinosa/AP
Maria Llonch retrieves belongings from her home in Pinar del Rio, Cuba, on Tuesday.
Photos: Hurricane Ian threatens Florida
Willie J. Allen Jr./Orlando Sentinel via AP
Traffic builds along Interstate-4 in Tampa, Florida, on Tuesday.
Photos: Hurricane Ian threatens Florida
Alexandre Meneghini/Reuters
A man carries his children thru rain and debris in Pinar del Rio on Tuesday.
Photos: Hurricane Ian threatens Florida
Alexandre Meneghini/Reuters
People drive through debris in Pinar del Rio, Cuba, on Tuesday.
Photos: Hurricane Ian threatens Florida
Joe Raedle/Getty Images
Frederic Herodet and Mary Herodet board up their Gulf Bistro restaurant in St. Petersburg Beach, Florida, on Tuesday.
Photos: Hurricane Ian threatens Florida
Yamil Lage/AFP/Getty Images
People stand outside a flooded warehouse in Batabano on Tuesday.
Photos: Hurricane Ian threatens Florida
Jim Watson/AFP/Getty Images
NASA’s Artemis I rocket rolls back to the Vehicle Assembly Building at the Kennedy Space Center in Cape Canaveral, Florida, on Tuesday. The launch of the rocket was postponed due to the impending arrival of Hurricane Ian.
Photos: Hurricane Ian threatens Florida
Photos: Hurricane Ian threatens Florida
Yamil Lage/AFP/Getty Images
A Cuban family transports personal belongings to a safe place in the Fanguito neighborhood of Havana on Monday.
Photos: Hurricane Ian threatens Florida
Shannon Stapleton/Reuters
Local residents fill sandbags at Ben T. Davis Beach in Tampa on Monday.
Photos: Hurricane Ian threatens Florida
Phelan M. Ebenhack/AP
People wait in lines to fuel their vehicles at a Costco store Monday in preparation for Ian’s arrival in Orlando, Florida.
Photos: Hurricane Ian threatens Florida
Adalberto Roque/AFP/Getty Images
A family carries a dog to a safe place in Batabano on Monday.
Photos: Hurricane Ian threatens Florida
Kevin Morales/AP
A woman takes photos while waves crash against a seawall in George Town, Grand Cayman, on Monday.
Photos: Hurricane Ian threatens Florida
Mike Lang/USA Today Network
Ryan Copenhaver, manager of Siesta T’s in Sarasota, Florida, installs hurricane panels over the store’s windows on Monday.
Photos: Hurricane Ian threatens Florida
NOAA/NASA
This satellite image, taken Monday at 1 p.m. ET, shows Hurricane Ian near Cuba, right.
Photos: Hurricane Ian threatens Florida
Yamil Lage/AFP/Getty Imagaes
A man helps pull small boats out of Havana Bay in Cuba on Monday.
Photos: Hurricane Ian threatens Florida
Gregg Newton/AFP via Getty Images
Shelves are empty in a supermarket’s water aisle in Kissimmee, Florida, on Monday.
Photos: Hurricane Ian threatens Florida
Martha Asencio-Rhine/Tampa Bay Times via ZUMA Press Wire
Cathie Perkins, emergency management director in Pinellas County, Florida, references a map on Monday that indicates where storm surges would impact the county. During a news conference, she urged anyone living in those areas to evacuate.
Photos: Hurricane Ian threatens Florida
Andrew West/USA Today Network
Sarah Peterson fills sandbags in Fort Myers Beach, Florida, on Saturday, September 24.
Photos: Hurricane Ian threatens Florida
Andrew West/USA Today Network
Besnik Bushati fills gas containers at a gas station in Naples, Florida, on Saturday. The station had only premium gas that morning.
Preparations across the state have been underway for days as residents braced for Ian’s wrath. People were lining up to pick sandbags or flocking to stores to stock up on supplies like water and batteries.
And as the hurricane marched closer, the closures began.
Throughout Florida, 58 school districts have announced closures due to this storm as campuses turned into shelters for those evacuating from their homes.
Disney World is set to close Wednesday and Thursday, and so is Kennedy Space Center’s Visitor Complex.
Hundreds of Publix grocery stores shut their doors Tuesday evening and were expected to remain closed through Thursday.
As millions evacuate, 176 shelters opened statewide and hotels and Airbnbs became available for people leaving evacuation zones, the governor said.
Local governments and state agencies have also been preparing those living in nursing homes and other senior care facilities to evacuate.
Florida has around 6 million residents over the age of 60, according to the state’s Department of Elder Affairs – nearly 30% of its total population. As of Tuesday, all adult day cares, senior community cafes, and transportation services in evacuation zones are closed, according to the department.
Authorities have also been readying services to fan out and respond to calls for rescue and then, in the aftermath of the hurricane, for recovery and repair efforts.
Nearly 400 ambulances, buses, and support vehicles were responding to areas where the hurricane was expected to make landfall, according to the governor’s office.
DeSantis activated 5,000 Florida National Guard members for Ian’s response operations, and 2,000 more guardsmen from Tennessee, Georgia and North Carolina are also being activated to assist.
Florida officials were also preparing to activate the state’s urban search and rescue teams.
“We have five state teams that are activated with additional five FEMA teams that are in play,” Florida Chief Financial Officer Jimmy Patronis said at a news conference Tuesday night. “We have over 600 resources to bear in addition to these out-of-town teams.”
Strengthening Hurricane Ian is well defined, with a clear eye, National Hurricane Center acting Director Jamie Rhome said in a Tuesday evening update.
“This is not what you want to see in the eastern Gulf of Mexico,” Rhome said.
When the hurricane hits, rising water is expected to move inland from the coastline, bringing life-threatening inundation and flooding to coastal areas.
Millions of people are under a storm surge warning, including the Suwannee River southward to Flamingo, Tampa Bay and the Dry Tortugas.
The area from Longboat Key to Bonita Beach, including Charlotte Harbor, could get up to 12 feet of storm surge, according to the hurricane center.
Warnings are also in place on the state’s east coast from the Flagler-Volusia county line to the mouth of the St. Mary’s River and along the St. Johns River.
After landfall, Ian is expected to crawl across the central part of the state, with damaging winds bringing the threat of tornadoes through Wednesday, according to the National Weather Service.
The slow churn over will “dump an enormous amount of rain on the state of Florida,” DeSantis said.
Ian is expected to dump at least 2-3 months’ worth of rainfall by Friday. Central and Northeast Florida is expected to get 12 to 18 inches of rain, while the Florida Keys and South Florida could get 6 to 8 inches.
Central Florida is expected to see “widespread catastrophic flash, urban, and river flooding” while the southern part of the state should brace for “considerable flash, urban, and river flooding,” the center said.
Under current projections, the hurricane is going to work its way from Southwest Florida, up to the central part of the state, then emerge over the Atlantic Ocean by late Thursday, when it could strengthen again and affect another part of the US.
Buying a home of her own became a priority for Kelly Robinson during the pandemic, as she began to feel cramped in her Indianapolis apartment.
“Last fall having to stay home so much, that really made me decide that it is time to buy a house,” she said. Among the top amenities she was looking for: outdoor space and more privacy.
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Further motivated by record low interest rates, Robinson set her sights to buy in the spring when she expected more properties would be available. It would also give her time to get her finances in order.
“But by the time I got pre-approved and started seriously looking at homes, the market got crazy” she said.
Robinson set a budget for $250,000. But in her market – the suburb of Greenwood – homes began selling within days, with as many as 10 competing offers, and sometimes going for $100,000 over the asking price.
“‘Crazy’ to me is not getting an inspection because you want to be number one on the homeowner’s list,” she said. “That is a risk I’m not wiling to take. And having to make an immediate decision the day you see it? That is another thing that makes me really nervous.”
So she decided to put the home search on ice and continue renting.
Courtesy Kelly Robinson
Kelly Robinson wants to buy a home outside of Indianapolis, but said the market is too aggressive now and has decided to wait.
“There are so many aggressive shoppers out there and I’m not willing to compete with that,” she said. “I need to be happy today, but I also want to be happy a year from now. If I overpay or don’t get an inspection, that will cause bigger issues down the road.”
Up against all-cash offers they can’t match and a feeding frenzy on each house they visit, many buyers are dropping out of the market and opting to wait it out and reevaluate their options.
The housing market was on fire this spring, leaving many would-be buyers burned out. Low mortgage rates have been fueling demand, but there’s also been a record-low inventory of available properties. That has pushed home prices to record highs, with some homes attracting multiple all-cash offers, and others selling for $1 million over the list price.
But home sales have fallen for the fourth month in a row, on a monthly basis, partially because there aren’t enough homes to buy, but also because the competition and higher prices are turnoffs to those who can’t afford to compete, according to a recent report from the National Association of Realtors.
“Clearly sales are moving down partly due to inventory shortage, but the affordability is squeezing some of the buyers out of the market,” said Lawrence Yun, NAR’s chief economist. “Homebuyers qualify for a mortgage based on their income, but with prices rising 20% or higher, it is simply pricing them out of the market.”
Only 32% of consumers believe it’s a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index for June. That’s a record low. High home prices were cited as the main reason people were pessimistic toward home buying. That sentiment was particularly strong among renters looking to buy for the first time, said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners,” he said. “It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments who have already established homeownership.”
Still, even in the face of tough buying conditions, many would-be homeowners remain intent on purchasing now, Duncan said, especially with mortgage rates still relatively low and a down payment ready to go.
“I’m encouraging my buyers to stay the course,” said Corey Burr, a senior vice president at TTR Sotheby’s International Realty in Washington, DC. “They need to have a persistent confidence their dream home will become available and they can buy it. Just because it is difficult doesn’t mean it is impossible.”
It’s true, buying a home is not impossible. Plenty of people are doing it. But more people have tried and still aren’t able to buy. And there are limits to how much time and emotional energy buyers are willing to put toward being shut out of the market.
First-time homebuyers Steven and Laura Andranigian planned to move from their home near Monterey, California, to the Coachella Valley in southern California, where they have family and Laura got a job teaching elementary school.
Courtesy Steven Andranigian
Steven and Laura Andranigian were ready to be first-time homebuyers when they moved to California’s Coachella Valley. But after house hunting for months, they have decided to rent instead.
Looking for a home that costs less than $500,000 has them chasing properties as soon as they are listed. Many times, the houses are gone before they can even make an offer. Twice they’ve been laughed at for asking for time to get a pre-offer inspection. They’ve lost out on five bids so far.
“You get told, ‘Here are the 10 things you need to do to buy a house’” he said. “We did 20 of those. And it is still like, ‘Well, you’re not able to participate.’ Because there are people who are flush with cash who also want to buy here now.”
They had been saving to buy a home for years and have been looking for months. But now they realize that their purchase options are to buy something that needs work in an area they don’t want to live, to wait for a new construction home and pay a premium for it, or to buy something over their budget.
“The only way to buy [a home that costs] over $500,000 is for my in-laws to gift or loan us the difference,” said Steve Andranigian. “But that seems excessive for people who have stable, good jobs to get $200,000 from family. Even when you’ve done everything right you still need more?”
The Andranigians have decided to abandon their home search.
“We decided to rent while we wait for the housing market to settle or resolve itself,” Steven said.
But getting a rental isn’t going to be easy either. The most galling turn of events, he said, would be to have to rent a home they had put an offer on before.
They’ve already seen some homes that they bid on come back to market as rental homes right after closing. Even though a property like that would be the kind of home they would love to live in, it would pour salt in the wound to have to rent it after trying to buy it, he said.
“To have to talk to the landlord, and hear they were sitting on a ton of cash and they wanted to turn it into a rental while we are just trying to buy our first home would be really hard,” he said. “But to find out the landlord is a hedge fund and it is owned by some faceless company? That may be worse. We don’t want to rent the place. We want to buy.”