Home Sales Predicted to Increase by 1%

Busy week ahead of us. New home sales are predicted to increase by 1% while pending home sales will decrease by 10%.

The above example shows a median-priced home in 2021 with 20% down and a 3.375% rate. Notice how the P&I ratio is 20%. Comparing the payments of 2021 to 2022, the difference of $298 is a 28% increase from last year.

You cannot just look at the payment on its own – Incomes have increased by 6% since last year…but that’s all-wage growth. Private sector wages have gone up by almost 10%, which is likely more indicative of the home buyer crop. But using 6%, and factoring in the increase in the monthly payment, the change in the P&I ratio is only 3%. The payment has increased, and affordability has gone down slightly but the impact on our customers is much less than headlines would lead one to believe.