The housing market has been a roller coaster ride since 2020, particularly as more people worked from home and looked for new places to live. Interest rates also hit a record low during this time, leading to a seller’s market where bidding wars and long lines of buyers at open houses were common occurrences.
Fast forward to September 2022, and real estate agents are suddenly not as busy as they once were.
Buyers and sellers are asking themselves, what is happening to the housing market, and what can we expect?
We look at the significant factors that are driving the current housing market.
The main reason for the market slowdown is rising mortgage rates. The most popular loan today is the 30-year fixed rate mortgage which accounts for more than 90% of all loan applications this year. At the beginning of 2022, the rate for this type of loan was at 3%, now, it’s just about touching 7%, according to Mortgage News Daily.
This rise means that borrowers will either have to pay more for the necessary home financing or borrow less to stay within their budget. Either way, consumer purchasing power isn’t the same as it was one year ago.
Other factors that have caused the sudden downturn in the housing market are high prices and low supply. With home prices rising by an average of 43% compared to two years ago, many buyers have paused and chosen to wait until things stabilize.
The supply of homes for sale is also significantly lower than in 2019. New listings are decreasing, hinting that sellers are getting jittery as they see more houses not selling as swiftly as they were previously. The demand for home tours and other homebuying services is also down by 11% in 2022.
The national inventory has taken a hit since homebuilders are slowing down production due to fewer buyers lining up at open houses. The U.S Census has recorded a housing construction drop of 18.5% for single-family homes this July compared to July last year.
Despite the doom and gloom, buyers have not disappeared despite the high selling prices and rental rates.
There’s always a silver lining during times of uncertainty, and some buyers are enjoying a market with less competition.
All you have to do is be more creative when the housing market is topsy turvy. By exploring smaller markets, buyers that have not given up on their home search may just find what they’re looking for even at a time when the market goes cold.
If you are looking to finance your home purchase this Fall season, you can reach out to our savvy loan professionals who can find the right program with affordable terms.
Call or message us on our website for an appointment. We look forward to hearing from you.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 1647414
8200 NW 41st Street Suite 200
Doral, FL 33166
Phone: (305) 725-5626
Raul Pestonit NMLS: 226247
Real Property Mortgage Company strives to ensure that its services are accessible to people with disabilities. Real Property Mortgage Company has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Real Property Mortgage Company makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows realpropertymortgageco.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Real Property Mortgage Company accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Real Property Mortgage Company continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Real Property Mortgage Company website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Real Property Mortgage Company website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: RaulPestonit@gmail.com