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Residential Housing Market Update – September 2022

One year ago, you had more time to buy a pair of jeans than make an offer on a home.  Mortgage interest rates were in the low 3% range, home values were increasing at an unsustainable pace, and inflation was getting out of control – the market was hot!  Buyers grew frustrated, and sellers had full control.

Today I am looking at the market in two ways, short-term and long-term.

In the short-term, we are going to see mortgage interest rates continue to rise and pressure on values of homes as affordability becomes a bigger issue.  The Federal Reserve is pushing hard to tame inflation back to 2% (last reported at roughly 8%), which means future federal rate increases are certain.

In the long-term, we still have an inventory issue, and the housing market does not have enough housing.  With inventory currently rising it may not seem like this is an issue.

Two things to think about when it comes to inventory.  One, all those buyers in the market did not just go away.  Rapidly rising mortgage rates have sidelined many buyers because of payment shock with current home values. Two, all the homeowners sitting at a low interest rate and sizeable equity will need a real reason to move.  Homeowners will stay in their homes longer than we have seen in the past.  We are already seeing the pace of new listings coming to market decline month over month.

Once the Federal Reserve gets inflation under control it’s likely we will find ourselves in a full recession, and rates will begin to come down to get us out of a recession.  At that time, the housing inventory issue we have will be revealed.  Stay focused on your real estate goals and let us help you navigate the always moving market.

September Residential Housing Market Update Video

Click on the image to watch the September Residential Housing Market Update.


To view The September Newsletter in magazine mode, click here.