U.S. GDP grew at a 2.6% annual rate in Q3, beats expectations
The U.S. gross domestic product numbers were released on Thursday and they showed a massive rebound from the previous quarter. A 2.3% growth estimate was beaten by the 2.6% actual rise in GDP for Q3 2022. Consumer spending stayed up despite higher inflation and it showed that the U.S. trade deficit had narrowed.
The only sector that limited the growth rate was housing. It’s no secret that the housing market saw a pullback in the third quarter, and the numbers reflected that.
Despite the positive numbers from the GDP, mortgage rates ticked past 7% on Thursday due to hawkish messaging from the Federal Reserve.
Are mortgage delinquencies an issue?
Inflation may still be high, but that’s not stopping Americans from keeping up with their mortgages. A recent report announced that the number of borrowers who are 90 days late or more on their mortgage payments was 1.2% in August 2022. That’s the lowest level since April 2020. Overall delinquency is at a near-record low of 2.8%.
Why aren’t real estate prices down everywhere?
Housing prices have seen a recent decline in several parts of the country, but not everywhere. Slate digs into the reason why some markets seem immune from price drops. The market in Florida or New York City rarely matches the market in Scranton, PA or Augusta, GA.
Real estate in California has actually seen declines in several formerly hot markets, but Florida has seen increases.
The overall takeaway from Slate is that there is a regional pattern of home prices, but the reasoning behind it isn’t as clear. The current hypothesis is that additional home builds in California have created additional homes available in the market and that is suppressing home prices there. Also, cities have been allowed to expand with updated zoning and adjustments to in-market laws and restrictions that prevented additional growth. Eastern cities also tend to have older homes that are easier to update and increase the price through renovation.
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