MINT HILL, NC – Something is happening in the real estate market across the country and it’s hard to ignore. While we have been in the most competitive real estate market in history, it’s showing signs of breaking.
The housing data for April has started to come in and it shows a different story. The very hot housing market is starting to flip and go into a cooling mode. Homes listed for sale have gone up and fewer buyers are scheduling tours. It was also shown that 15% of home sellers discounted their asking price in April.
Rising Rates & More Inventory
With rising interest rates and more inventory hitting the market, the housing market is sure to cool off some. However, we are headed into the hottest months of the year with May, June, and July offering a prime time for the market. It could soften a bit through the summer before going into a major cool down come fall.
The rising rates have only caused a mild cool-down, but they could go up even higher before the end of the summer. There is also a logjam of buyers still trying to find a home they can afford. Some believe, it will take a few months for things to shake out and for the true impact to hit the housing market.
Higher Mortgage-Payment-to-Income Ratio
Rates going up will cause buyers to have a higher mortgage-payment-to-income ratio. While in December of 2021, the average home buyer might have spent 24% of their monthly income on their mortgage payment, which presently is now around 34%. It’s the highest since 2006, which is causing some to wonder if we are in a housing bubble.
Some economists believe certain housing markets are in for a correction, including Phoenix and Charlotte. Due to the home prices becoming more detached from economic fundamentals, it’s possible several markets are in for a correction.
However, not all economists agree when it comes to housing and they didn’t before 2008, either. In fact, the 2008 crash took make self-proclaimed experts by surprise. What’s coming for the housing market in the next year or so, will likely take some of the experts by surprise, again.
There are many factors that could cause a big flip in the housing market. With the hottest buying months coming up, things probably won’t cool off much until the end of the summer or the fall; or sooner depending on the individual markets.
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
