The federal government shutdown has now passed the two-week mark, interrupting data releases and likely delaying some home closings. The September inflation report that was originally scheduled for this week will be released next Friday, Oct. 24.
While it’s hard to say what the overall trend will be, I expect that housing inflation will have continued to cool. The September rental report showed another month of easing asking rents, which are now down 3.2% from their 2022 peak.
This has modestly improved housing affordability nationwide, and particularly in Austin, TX, the new most affordable rental market.
In contrast, median asking rent in the New York metro area exceeds the recommended 30% threshold for the typical household, and within the city, rents continued to climb in the third quarter.
This is one reason why housing affordability has been a prominent issue in the New York City mayoral election. In fact, soaring rents mean that a household with a monthly budget matching the typical Manhattan rent could afford to buy an above-median-priced home in four nearby cities that are popular with New York-based home shoppers.
In a recent survey of Gen Z homeowners and hopefuls, respondents report feeling challenged, but undaunted by today’s housing market. Even as 82% say buying a home is harder for their generation, nearly three-quarters of those surveyed are actively saving for a down payment.
In weekly housing data, we saw an uptick in newly listed homes relative to recent weeks, which could signal more engagement from sellers. It was enough to prompt a modest uptick in active listings growth and median listing prices, which remained little changed from last year.
Mortgage rates eased lower this week, marking a sixth week below 6.5%. Lower rates could improve home sales even without an uptick in seller interest given current inventory levels, but the government shutdown may be an offsetting, if temporary, drag.
The NAHB Wells Fargo Housing Market Index, a measure of builder confidence, improved in October as current sales, expected sales, and buyer traffic all improved. This data suggests that single-family permits also increased modestly in September, although we won’t have this data, which is typically published each month by the U.S. Census Bureau, until after the government reopens.
Finally, we’re just wrapping up the Best Time To Buy nationwide, but conditions are still pretty good in most major metros and a handful of markets where shoppers can even anticipate the peak next week.
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