MINT HILL, NC – It might seem like wishful thinking with all the bad news coming out lately about interest rates and the real estate market, but the Mortgage Bankers Association believes home-price growth moderation will continue and rates will drop in 2023. Some mortgage brokers have even pointed out that a pretty big pullback in housing demand has already happened.
According to Reuters.com, U.S. mortgage rates jumped to 7.16% recently, which is the highest since 2001. With rates going up, home-price growth will likely flatten out throughout 2023 and 2024. Some believe this could lead to households catching up when it comes to savings and wages. Maybe more buyers will be able to afford homes that are currently too expensive.
Will Prices Drop in Some Markets?
Rates going up, a recession looming (or happening, depending on whom you talk to), and home sales slowing hasn’t led to big price drops yet, but they could. In some real estate markets, prices might drop as we are already seeing some homes for sale in Mint Hill and other markets staying on the market longer.
It’s likely markets, such as Phoenix or Austin might see price drops, along with other expensive housing markets. However, even with the potential of lower prices, there isn’t expected to be a surge in inventory. Many experts believe homeowners will hold onto the ultra-low mortgage rates they have instead of selling.
The data from the Federal Housing Finance Agency shows that about 25% of homeowners have a mortgage rate of 3% or lower and over 90% have rates lower than 6%. Plus, supply will likely remain tight.
With everything happening the way it is in most local real estate markets; many sellers are not selling their homes. They are watching other sellers cut list prices to attract buyers and deciding not to sell. Even builders are currently getting spooked by the signals showing a slow in new construction housing.
Even if rates do come down, they will likely stay higher than the rates many homeowners currently have. This could cause fewer listings on the market as the country heads into a recession (or the current recession gets worse).
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me. I will help you make the right move! Anna Granger (704) 650-5707 | annagrangerhomes@gmail.com | www.1stchoicepropertiesinc.com
