According to Selma Hepp, who is the Chief Economist at CoreLogic (a real estate data juggernaut), home prices have bottomed out.
Active listings are up. Home sales are down. Fewer newly listed homes are hitting the market. Home prices are up and it’s taking longer to sell a home.
· 59.9% (Percentage of homes for sale increased compared to 2022)
· 9.3% (Increase of total number of unsold homes compared to 2022)
· 20.1% (Percentage of fewer newly listed homes for sale compared to 2022)
· 6.3% (Percentage increase in median price of homes for sale compared to 2022)
· 54 days (Average number of days on the market which is 18 days longer compared to 2022)
Source – Realtor.com
What will happen next?
While it would be impossible for fact checkers to begin correcting housing market forecasts, it’s safe to revert back to simple economics of supply and demand.
The Fed is trying to control the demand by increasing the cost of borrowing money (interest rates).
With 8 consecutive interest rate hikes by the Federal Reserve, it appears that the intended effect is upon us. Inflation is beginning to cool, people are borrowing less due to higher interest rates, and the real estate industry is certainly feeling it.
Given the recent inflation report (published yesterday April 12th) it appears there may be a light at the end of the rate hike tunnel. Industry experts suspect that if the inflation rate came back under 5.7%, then it would be realistic to anticipate the Federal Funds Rate to hold steady, rather than have another hike.
As a result, the market has responded and mortgage rates appear to be following more in line with the 10 Year US Treasury Yield once again (rates are getting better).
What does this mean for you if you are a real estate agent?
If rates continue to creep lower, buying sooner than later may be more advantageous for your clients as housing inventory remains low. Offer our 2-1 buydown option if the seller is covering the buyer’s closing costs. Here’s more about how that works: What is a 2/1 Buydown?
What does this mean for you if you are in the market to buy a home?
Since there are significantly fewer homes available for sale than there has been in recent years and interest rates appear to be going down, the demand vs. supply curve of homes will grow, causing home prices to go UP! If you’re preapproved and ready to make an offer, holding off to buy a home for another few months may cost you more as a result; even with a lower interest rate.
Still searching for a trusted lender? Here’s guidance to do it: https://www.thehomeloanhub.com/post/how-to-find-a-trusted-lender.
If you haven’t gotten your preapproval letter, be sure to get a copy prior to making an offer on a home. This could prevent you from losing thousands of dollars in earnest money, as well as appraisal and inspection fees.
Like what you’re reading? Check out my other articles at www.TheHomeLoanHub.com
Terry Roberts, USMC Veteran | Sr. Loan Officer NMLS 397987 | E Mortgage Capital
With a rich background spanning over a decade in the mortgage and real estate sectors, Terry Roberts has become a cornerstone in guiding over 10,000 clients through the complexities of the home purchasing journey in the United States. His expertise covers a broad spectrum of housing loans including conventional, FHA, VA, and cutting-edge new construction financing options.
Emerging from challenging early life circumstances, including teenage parenthood, dropping out of high school, and facing homelessness, Terry's determination led him to serve in the US Marine Corps. This decision was driven by a commitment to safeguarding freedom and securing a better future for his family. His active duty service in the US Marine Corps, marked by nearly a decade of dedication, instilled in him a profound desire to assist fellow Americans in achieving homeownership, a cornerstone of the American dream that he fiercely believes in.
Terry leverages his profound understanding of the real estate market to empower individuals in their pursuit of property ownership as a strategic investment for wealth generation. His journey from adversity to becoming a beacon of hope and guidance in the real estate domain is not just inspiring but a testament to his commitment to his clients' success.
Connect with Terry Roberts, a proud USMC Veteran and Senior Mortgage Broker (NMLS 397987), for expert guidance on your path to homeownership. Visit www.TerryRoberts.com at E Mortgage Capital, where every client's dream is approached with the respect and dedication it deserves.
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