Update: How's the Market?
Curious about the current market?
As we approach the New Year, we are excited about the road ahead of us! While things are uncertain at this time, what has happened in the market over the past few months can give us insights as we begin to navigate the next year.
First, let’s look at mortgage rates. Mortgage rates have been a rollercoaster ride over the past few months. This has been the fastest rise in mortgage rates since tracking began over 50 years ago. However, experts are predicting that rates will level out throughout 2023. And we have begun to see a bit of this reprieve over the last few weeks.
I also want to take a moment to address the headlines we have been seeing. Lately, it has been doom and gloom with predictions of crashes and dives in home equity. What we need to look at when it comes to these headlines are perspective and context. Homeowners today have high levels of home equity currently that will be able to withstand potential price declines and prevent a lot of foreclosures in the future. When we saw the last crash in ‘08, we saw a lot of foreclosures due to unstable lending. Industry experts are not predicting the same level of instability moving into the new year.
Lastly, I want to review the crutch of the housing market: supply and demand. Many believe that the market will adjust to the new normal of increased mortgage rates and benefit from a strong demographic-driven demand relative to the long-run shortage of supply. It is unclear if this will segue into the balance of supply-demand that we have seen in previous years. What we do know is we still have a surplus of buyers in most markets as we head into 2023. We have also seen a surge of Millennials that are aging into the home-buying stage of life. These factors will continue to put upward pressure on home prices.
If you’d like to chat further about current market trends or if there is anything I can do to help you achieve your real estate goals, please don’t hesitate to reach out.
