June 2023 Real Estate and Mortgage Report

Our monthly real estate market report includes information about housing prices, inventory, mortgage rates, home sales and market predictions. We summarize news headlines and share important market updates.

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Here are some quotes from this month’s report:

• The only times the spread approached or exceeded 300 basis points were during periods of high inflation or economic volatility, like those seen in the early 1980s or the Great Financial Crisis of 2008-09.
• It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal and provides investors with more certainty. However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.
• Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.
• The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . It is not very useful for measuring home price appreciation because it is affected by the ‘composition’ of homes that have sold.
  For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.

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