Bigger Pockets: Housing Market Shift: Inventory Catapults Back
The real estate market has largely been frozen for the past two years. High mortgage rates have kept first-time buyers off the market. The payments, combined with high home prices, were simply too much to bear.
Potential sellers, who likely locked in historically low rates in the pandemic era, were also unlikely to move. To do so would mean giving up a low payment for a higher one, and likely while paying more for a home.
Today, markets are starting to thaw. Mortgage rates haven’t dramatically declined, but are off their highs. And some sellers are coming onto the market, as seen by a rise in home inventory.
The market is likely shifting slightly in favor of buyers. They can potentially get a reasonable price today, and a reasonable interest rate. If rates decline, they can refinance. Today’s sellers are starting to move prices lower in most markets from recent highs.
With the edge towards the buyers, it’s likely that homeowners will see a slight dip in home equity.
In the meantime, home prices are likely to stay stable. However, homebuilding costs are likely to jump with increased tariffs on many key goods such as lumber. That could make existing homes a more attractive buy, and homeowner stocks could get squeezed by higher costs.
To listen to the full podcast on the changing real estate market, click here.