Home Purchases Now Near Its Lowest Level of the 2019-22 Period Due to Rates More Than Doubling Since January, 2021

Key takeaways:

  • The 10-year old seller’s market continues, evidenced by:
    • Modest purchase volume declines, in spite of a cumulative 39% increase in constant quality HPA since January 2020,
    • Historically tight supply,
    • The work from home revolution, and
    • Arbitrage opportunities due to metro & regional price differences.
  • Purchase volume for week 35 is down 31% & 15% from 2021 & 2019, respectively, with HPA projected to moderate to 12.4%, 11.2%, & 10% in August, September, & October 2022, respectively.
  • If the current mortgage rate of around 6% holds, we expect December 2022 HPA to slow to 6-8% (y-o-y) as demand will further moderate and supply will increase.
  • HPA declines seem most likely at the high end of expensive markets, at the low end of some FHA markets, and in metros with stagnating or declining job growth.

PDF to full report


Edward J. Pinto

Senior Fellow and Director, AEI Housing Center.

Tobias Peter

Research Fellow and Assistant Director, AEI Housing Center.

EDITORS NOTE: This AEI Housing Finance Watch for Week 35, 2022 is republished with permission. ©All rights reserved.

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