11/10/2022
🏡 How is the housing market? Is now a good time to buy or sell? When will the mortgage rates go back down? These are just a few questions I've been getting recently and the housing market seems to be on most people's minds these days.
I just watched a very insightful video from Barry Habib (Mortgage Industry Executive), and he gave his predictions on where mortgage interest rates will be in the upcoming months. Here are the cliff notes version:
He anticipates that mortgage rates will go down to around 5% sometime over the next 6 months. Obviously disastrous and unexpected events can and do happen, so no guarantees, however, housing prices are holding steady and not going down too much, because we still have a housing supply issue.
Why haven’t homes values came down a lot?
Although the real estate market has softened a bit all around the country, we still have a housing supply shortage which is why home prices aren’t coming down significantly. Why? A simple case of supply and demand.
Demand is created by household formations (older kids move out and get their own place). Supply is mainly only created by new construction (as people selling also must find a place to live). We are creating about 1.7 new household formations every year, but the net supply created each year is only around 1.2 million.
Does this mean I should wait to buy after rates go down?
*The best time to be a buyer is in a pessimistic market* and we have a lot of pessimistic people out there right now, just waiting for the rates go back down.
When rates do go back down, demand will go back up and we’ll still have a supply issue, AND buyers may not have the leverage then, that they have now. Now, buyers can negotiate a bit, get offers accepted with contingencies like home inspections and home selling contingencies, whereas this was almost impossible not so long ago, for buyers.
Just remember, if you are renting you are paying someone else’s mortgage and not building any equity for yourself, no matter the interest rate. You can always refinance when rates do come down.
Now may be the chance for you to get the home you’ve been wanting and needing for the past couple of years, but the crazy sellers’ market made it impossible.
Questions? Call me @ 740-243-9536
