MINT HILL, NC – You might be wondering what the rest of this year will look like for real estate. With mortgage rates more than doubling this year, the red-hot housing market cooling off in most areas, and the lines of buyers dwindling, it might seem like nothing else can really happen this year.
Most buyers and sellers feel stuck right now. Home prices are just starting to fall from the peaks they reached, but nowhere near enough to make up for the much higher mortgage rates. This is causing many buyers to remove themselves because they cannot afford to purchase a home right now.
Sellers also feel stuck because they don’t want to let go of their super-low mortgage rates by purchasing a new property. Renters, simply cannot afford to move or buy, now, and many homeowners are afraid they purchased at the peak of a market that is falling fast.
Nobody Wants to Buy in a Market That’s Falling
When the real estate market is falling, nobody wants to buy. This makes perfect sense as you’d never buy a house, if you were told it would lose $20K in value over the next year. It just wouldn’t make financial sense.
There is quite a bit of uncertainty with both buyers and sellers today. Many are wondering if mortgage rates will continue to go up, if prices will fall, and when buyers might return to the market.
It’s a Game of Limbo Right Now
Buyers are seeing the market for the rest of 2022 as a game of limbo. They have a mindset that home prices will drop and most don’t want to be a part of this. Some experts believe prices might fall as much as 15% over the next year across the nation. Some home builders are already dropping prices by 40%.
The housing market is cyclical. Prices rose by more than 40% over the past two years from March 2020 to June 2022. This makes any price drop of 20% or less seem a bit less significant. However, it’s still very significant to the person who bought a house at the peak or buys now and watches their home value drop fast.
Some experts don’t think prices will drop that much, but that brings in another issue. If home prices don’t drop enough to make up for the higher mortgage rates, which may continue to rise, the buyers won’t come back to the market.
It’s a bit of a standoff right now in the market and things are not properly sorted. What will likely happen for the rest of 2022 will be less significant than what you might see happen throughout 2023.
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 | firstname.lastname@example.org | www.1stchoicepropertiesinc.com