Post by Daniel Maurer
Expect summer trends to continue, low inventory and high interest rates. The market isn’t completely dead however, many people still NEED to move. Families grow, people move because of new jobs, or retire and downsize, but the days of simply buying a more expensive home than you could normally afford because of low interest rates are officially over. Here are a few quick thoughts on the current market.
Entry level markets are still extremely competitive. The lack of inventory for first-time home buyers is propping up pricing in these markets and new listings are still flying off the shelves.
Interest rates remain high. They may even possibly increase even again with another Fed rate increase later this fall. If you are planning to buy this fall, I would consider locking in a rate now. If rates lower you can always adjust, but better safe than sorry.
Existing-homesales are down over 16% in 2023, compared to 2022 (according to the National Association of Realtors). Expect the market to begin righting itself in 2024 as things start to return to normal.
New-home sales rose 4.4% (adjusted) in June, partially driven by a large increase in FHA loan applications. The percentage of new home sales backed by FHA loans rose from 12% to 14% in the second quarter of 2023.
Inflation, housing prices, and interest rates are scaring away many buyers. According to the Fannie Mae Home Purchase Sentiment Index (HPSI), 82% of consumers reported that they put home-buying plans on hold in 2023. Prices and inflation are stabilizing, hopefully lowering rates in 2024 will put buyers minds at ease.
Foreclosures continue to trend down (9%) month over month in 2023, although remain higher than previous years. This can be seen as a sign of a rebounding housing market.
If you have questions about the market or are considering amove, please contact me to discuss.
If you are looking for some advice on a real estate transaction, my door is always open