Banks have Stopped Giving Mortgages (Prices Just Dropped 15% in Austin)
The Mortgage Market is Crashing, with a 10-Year Low in Mortgage Purchase Applications. This is drop in demand is causing Home Prices to go down. Fast.
Especially in a Housing Market like Austin, TX. Where the Median Sale Price has declined by 14% over the last 5 Months according to Redfin. A decline in homebuyer demand, especially among Homebuyers using mortgages, is to blame.
The reason that this decline in Mortgage Application and Issuance is so concerning is because over 75% of Home Sales in America are financed with a Mortgage. So if the US Mortgage Market drops, then the Housing Market drops.
One reason for the decline in demand is Mortgage Rates. The 30-year Fixed is now over 7%, making the cost of buying and owning a home too expensive. Especially in a expensive Housing Markets like Austin, Los Angeles, San Francisco, and Seattle, where Home Prices have dropped the most.
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