The housing market has reached a turning point and the housing shift has begun. Cheap money is gone, kaput, no longer available. In the past couple of years, cheap money has fueled a booming housing market that resulted in record-low inventories of available homes and lots of frustration for potential home buyers.
Record high prices and the booming seller’s market gave ample opportunity for the baby boomer market to “cash-out” and move to smaller homes more suitable to an “aging in place” lifestyle. Thing is – they didn’t. Instead, many baby boomers chose to stay in their oversized homes. CoVId played a role in this decision for many households as grown children with their own families in tow bunkered in with their senior adult parents to ride out the CoVid lockdown. And some Boomers saw their home as just another good asset in their portfolio as they rightly feared inflation would result in a future stock market correction.
Homebuyers take heart as your time appears to be coming. Fannie Mae reports that both homebuilding and home sales are headed for a slowdown. Even though interest rates have gone up the rates are still affordable and inventory will be increasing throughout the summer. Homes are available for purchase again.
“I think the big story here is the housing market is at or very close to an inflection point where it’s about to start cooling down nationally,” he told Inman. “Given local variation, there are parts of the country that have already passed that inflection point.” Jeff Tucker, Zillow Senior Economist
“Home price drops are climbing in the national data.” “We’re starting to see a bit of relief when it comes to new listings” “That is a good leading indicator that buyers will have more options this summer,” Redfin Chief Economist Daryl Fairweather
What is driving this housing market shift” Rising mortgage rates are the driving force. Rising rates have made housing more expensive and knocked some buyers who can’t afford to buy homes as rising interest rates have increased their monthly house payment to a level where buying a home is not an option. With demand leveling off there are more homes available to buy. But don’t get too excited if you are still looking to buy a home this year.
(a bubble is unlikely) “because of the hot buyer demand that still exists. There are a lot of buyers who have been waiting for less competition in the marketplace,. Our current forecast says this is about where rates will go,” she said. “We don’t see them rising substantially more.” Jessica Lautz, president of demographics and behavioral insights at the National Association of Realtors (NAR)
Should you wait to buy a home when prices decline or interest rates become more affordable. My advice is a strong NO. And this advice is supported by Redfin economist Daryl Fairweather “the best time to buy a house is when a person needs a house”