Eyeing a home? Better get that offer in.

A technicolor dream home and a frozen housing market

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  May 20, 2023 • Issue #93 Happy Saturday! This week we’re talking about how a debt ceiling default could send the housing market into a “deep freeze,” why homes are still selling at such a fast clip and a house in Massachusetts that takes the word “colorful” to a whole new level.

It’s still a competitive housing market out there

Eddie Lee / Money; Getty images There are many different ways to describe the housing market right now. (“Frustrating” and “confusing” come to mind.) But yep, I’m going with “competitive.” Sure, home sales are way down compared to previous years. Both mortgage rates and home prices, on the other hand, are pretty darn high. And yet, there’s still a lot of competition. To put it simply: buyers want to buy, they just don’t have a lot to choose from. So when a well-priced home in a nice neighborhood comes on the market, it’s snapped up at lightning speed. A new report from Redfin found that almost half of the homes sold in April were under contract in two weeks or less, as my colleague Sarah Hansen recently wrote about. Other signs of a not-so-cold housing market, according to Redfin, include: Requests for home tours are up by 27% compared to the start of 2023. Homes are sitting on the market for a median of 33 days, the shortest amount of time since last October. More than 30% of homes are selling above their final listing price, the largest percentage since last September. On the positive side, the median asking price for newly-listed homes these days is $395,725; unchanged from a year ago. Many housing experts believe that mortgage rates have likely peaked and could start drifting lower later this year, which could help bring sellers back. And if more inventory does come on the market, prices could stabilize for buyers.

For more on what’s happening in the housing market: Half of Homes on the Market Are Selling Within 2 Weeks — Despite High Mortgage Rates

For more on what’s happening in the housing market: Mortgage Refinance Applications Surge to Highest Level in 8 Months

A debt ceiling default would chill the housing market

Getty Images A lot of ink has been spilled about the debt ceiling, a potential default by the U.S. Government and what effect that would have on the economy (if you have questions about the debt ceiling, Sarah Hansen has answers on that topic, too). Much of the attention has rightly been placed on what a default — which could happen as soon as June 1 —  would mean for sectors of the economy like the stock market and social security. But those aren’t the only ones that will be affected. According to a recent report from listing site Zillow, the housing market could go into a “deep freeze” if the debt ceiling crisis isn’t resolved soon. As Money reporter Adam Hardy wrote last week in his coverage of the report, the effect on real estate “could  be catastrophic, potentially causing the already struggling housing market to slump further.” To be clear, Zillow senior economist Jeff Tucker, who wrote the report, thinks a debt ceiling default is unlikely. But if this scenario were to play out, it could have a devastating effect on a housing market that is still trying to reach a sense of normalcy after the pandemic. Especially for first-time homebuyers who are already feeling the brunt of higher rates and a lack of affordability, Tucker tells me.  A further increase in rates means many of them would be “priced out of the market altogether,” he says.

For more on what’s happening in the housing market: A U.S. Debt Default Could Send the Housing Market Into a ‘Deep Freeze’

Living life through rose (and green, yellow and purple) colored glasses

Schillem "Nemo" Guerin of Alouisjean Media A home recently went on the market in Somerville, Massachusetts, that features enough color combinations to put a kaleidoscope to shame. You get a lot for the list price of $1,475,000. The single family home was built in 1860 and boasts 3 bedrooms, 1.5 baths, a sun porch and nearly 10 foot ceilings. It comes with a chef’s kitchen and wall-to-ceiling built-in bookshelves, too. Oh, and it’s located on a more than 8,000 square foot lot with a perennial garden and plenty of additional yard space. If you think the exterior paint scheme of fuchsia, green and purple is eye-catching, wait ‘til you see the inside. Striped walls in pinks, greens and blues complement the hand-painted floors featuring flowers and a leopard print pathway leading to the main bedroom. Real gold and copper leaf accents can be spotted throughout the home. The interior reflects the style of the seller, who has a passion for pink, an eye for artfully-clashing colors and is not afraid to break the rules. “It’s just like a jewel box,” Shannah Hall Franckum, one of the listing brokers on the Carol Kelly Team at Compass RE, tells me. If you’re thinking this would be a doll of a house to live in, you’re not alone. The home was put on the market on May 3rd and was under contract by May 10th. Schillem "Nemo" Guerin of Alouisjean Media

‘Til next time, P.S. Have you seen a cool listing on social media or have a question about housing or mortgages you desperately want answered? Let me know on twitter at @LeslieLCook, or via email at leslie@money.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page.

Money’s Essential Home Buying Resources: Spring 2023

On the hunt? Check out Money’s Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates. Thinking of refinancing? Our list of The Best Mortgage Refinance CompaniesMortgage Refinance Calculator or these refi tips. Key question: How much house can I afford?

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