Housing Market Conditions

The housing market is always evolving, with changing factors such as interest rates, and supply and demand influencing the overall conditions. There may never be the perfect time for a transaction but ultimately, the goal is to purchase your home at the best rate with the lowest possible mortgage interest rate. It is unusual to find the best deals in real estate at the same time of low mortgage rates; experts most often buy when the home prices are lowest and most often refinance to a lower interest rate at a later date.

HOW INTEREST RATES IMPACT THE HOUSING MARKET

Interest rates will always impact the overall housing market. During the 2010s, mortgage rates were below 4 percent; during this time, the interest portion of mortgage payments was lower generating a lower monthly mortgage payment. The net effect is that when mortgage rates are lower, prospective buyers can either qualify easier or afford to borrow more money thus giving consumers more purchasing power.

Today’s 30-year mortgage term loan rates are higher than a decade ago, similar to those in the 1990s, the market is now awaiting more available inventory and more new prospective homebuyers.

According to National Association of Realtors data, home sales declined 3.4% in April 2023, and 23% down from the previous year. This was caused by higher mortgage rates, uncertainty about banks, uncertainty about the job market, and the possibility of job loss during a future recession.

Timing is everything in the housing market; when you feel the time is right, it is very helpful to have a knowledgeable real estate agent and a mortgage loan officer to help you secure the best possible property purchase and mortgage product that is right for you.

SUPPLY AND DEMAND IN THE CURRENT MARKET

Supply and demand is a for-ever circulating factor in the housing market; the recent years have shown us a lower than normal inventory with less houses available on the market; this drove up sales prices and in many cases, we witnessed homes sold for well above the sales price.

Our current shortage of housing inventory is a result of a number of factors, including:

• The COVID-19 pandemic led to fewer homes being built in 2020-2021.
• Fewer workers were available during the pandemic to work to build new homes.
• Rising construction material costs made it more expensive to build new homes.
• More homeowners decided to hold on to their properties.
• More buy and flip investors entered the housing market to buy homes to rent out or flip for a profit.

REMOTE WORK AND CHANGES OF HOUSING PREFERENCES

Another factor impacting the housing market has been more people are working remotely from home and enjoying the freedom that comes with that opportunity. As a result, people are looking for homes with office spaces. They are also willing to move out of expensive cities to suburban or rural areas and are seeking a nice home in which to live and work.

Whether you’re looking to buy, sell or refinance your home, HDA Insurance Brokerage is available to insure your new property; whether an owner-occupied home or a tenant-occupied rental unit. You may obtain a FREE Home Insurance Quote Online when you’re ready.