05/18/2022
Why is the real estate market crazy? Simple supply and demand dynamics.
Affecting supply: Boomers are staying in their homes longer than prior generations and supply chain challenges make new construction cost prohibitive.
Affecting demand: Interest rates have been very low for a long time, Millennials, who held off buying for a long time, are now entering the market and competing with Gen Z's for first time homes.
What will change and when? Interest rates are predicted by many to finish in the 5% to 5.5% range this year, which is higher than the last couple of years, but still lower than almost any time over the last few decades. This modest climb won't likely be enough to overcome all the other factors above to bring us to a more balanced market.
The wild card could be the double whammy that inflation creates: Our dollars won't go as far to cover the general cost of living AND one of the only tools to fight it is hiking interest rates more aggressively. These two factors could push a significant amount of people out of the housing market, making less competition for existing listings.
What does this mean for YOU? Comment below or give us a call at 414-207-8043 to start the conversation!
