MINT HILL, NC – The average mortgage rate is now over 7%, which likely means the housing party is now over. After the big party, there is usually a hangover and that is the phase we are currently entering. Sometimes, a hangover can be very bad, and other times a bit milder.
Each time the mortgage rates have gone up this year, more potential buyers can no longer afford to buy a new home. This has led to an end to the frenzied housing party with multiple offers and bidding wars far less common than last year or even earlier this year. It’s even possible for a real estate agent to hold an open house and nobody shows up, now.
How Long will the Hangover Last?
If you believe the housing party lasted for about the past two years, it’s safe to assume the hangover might last for at least a year or longer, too. Sometimes, after a fun party, you might have an actual hangover for a few hours in the morning or it could last all day long. Could you imagine how long it would take to recover if a regular party was two years long?
Cheap debt from the Federal Reserve was the fuel for the housing party. Inflation and higher interest rates are now ending the party and sending us into the hangover stage.
When 2020 happened, the rates were kept very low, but that didn’t last forever. The lower rates sent home prices through the roof, too. Now, to fight inflation, rates are going up fast with mortgage rates doubling this year. It’s like the police showed up at the housing party and now everybody has to leave.
Experts Say 2023 Home Prices will be Flat
Several experts believe home prices in 2023 will be flat. They also believe the housing market has been resilient and sturdy, but can that last forever, or is it about to break?
The one thing helping the housing market survive is the lower inventory. With a shortage of homes still happening, it’s possible prices may not crash as much as some believe, but only time will tell.
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 | email@example.com | www.1stchoicepropertiesinc.com