Summary:
- Why isn’t the housing market behaving like it should?
- Inflation. It is easing up, so why aren’t home prices?
- What you need to KNOW!
Let’s recap when it all began…. the last year:
The Federal Reserve kicked-off its rate hike campaign in March of 2022, in hopes to slow the housing market. This led to a rise in mortgage rates and as a result, eventual led to a very slight decline in home prices, for about 60 days.
However, what we’ve learned; after 10 rate hikes and now into July 2023; is that the housing market is anything but predictable. As the inventory levels remain at an all-time low, and home prices remain at an all-time high even with a slight decrease in price, nationally. 3.1% according to CNN Business.
Why didn’t higher mortgage rates result in more housing inventory?
When the Fed raises interest rates, that increases the rates that banks charge each other for overnight loans. Banks and other financial institutions pass on the higher cost of borrowing to consumers by charging them higher rates on mortgages, credit cards, auto loans and other loans. In theory, consumers respond to this by cutting back on spending, which means businesses can’t raise prices as much as they had. Which means inflation would decrease at a higher level. And it finally has eased up, a little…BUT…
What is the BIG PICTURE:
The Fed tightening up has had a huge impact on the housing market; when mortgage rates rose, you saw demand cool; however, it’s still an environment where you have more demand than you have supply.
And that is WHY, the housing market isn’t behaving like it should.
We are still playing catch up from the Great Recession, when no one built new homes for nearly a decade. A DECADE!!!
In 2020, building started to pick up, but know-where near the amount needed to stall the housing market.
In short, Supply has not reached the DEMAND, no matter the interest rates.
People will always need to buy and sell REAL ESTATE:
~ Death ~ Divorce ~ Duplication ~ Destination
If you fall into one of those categories, KEEP IT LOCAL. Local lender, local real estate agent and your local favorite title company, Ticor and me. Your MICRO markets matter. Your local experts matter.
Because what we hear is national news, what you need to KNOW, is your LOCAL NEWS.
In the Willamette Valley:
- Prices are up – BOTH month over month and year over year
- 2.5% and .2% YOY
- Months of inventory are down – 1.6 months
We are in a market where SUPPLY has not yet reached the DEMAND.
KEEP IT LOCAL. Keep you information Local!
Local lender, local real estate agent and your local favorite title company, Ticor and me.
What we hear is national news, what you need to KNOW, is your LOCAL NEWS.
