Is the housing market hot or cold?
With buyer demand growing due to lack of inventory, and mortgage rates still moving up and down… what can we possibly expect moving forward. With most homeowners sitting at 2% and 3% mortgage rates, sellers are feeling stuck, and have to have a real reason to move. The average time homeowners stay in their current homes will likely increase beyond the typical average of 7 years which will further push down inventory and may be that way for some time.
Some homebuyers are still sidelined right now due to higher mortgage rates and affordability, and with the lack of inventory, it is creating competition for those buyers that remain in the market.
With the Consumer Price Index, the CPI, which is how the Fed’s track inflation, falling below 5% in April, it gives us an indication that will see mortgage rates starting to fall in the near future. The Fed’s will start to pivot and stop increasing the Fed’s Funds Rate, hopefully in June. As mortgage rates fall with positive CPI data, you can expect this is going to increase buyer competition and stabilize home values and normalize home appreciation to 3-5% per year.
Buyers have an opportunity right now to negotiate fair terms with sellers, but as we see mortgage rates start to fall in the coming months, sellers will begin to gain some additional power back.
Whether you’re a buyer or a seller, give us a call here at Bear Flag and let us help you on your next move.
– Talk soon, Martin Atencio