Key housing market trends takeaways
Q: When are we going to go back to a normal market?
Chris Bennett: We aren’t – this is our regular market. You’ll find that small, incremental changes in interest rates will have effects on existing home sales. If interest rates can go down by 50-100 basis points, we may see it translate to an increase of 10-20% in home sales. As time goes on, people will get used to this new normal, realizing that 3-3.5% interest rates are gone and not coming back anytime soon.
Q: Should we expect home prices to increase due to lower inventory?
Chris Bennett: Not significantly. We need homeowners’ incomes to catch up to where home prices are, especially when you layer higher mortgage rates.
We can’t have a case where home prices increase by 10% every year unless incomes go up by 10% each year. They have to correlate with the other. Due to the inventory shortage, one got away from the other.
We’ve been seeing relatively stable prices, meaning the average income is going up ~5%. I don’t think we’ll see housing prices slide by an appreciable amount, but I don’t think we’ll have a case where we see prices increasing 5-7% a year because again, incomes need to balance out.
Q: What do you think rates will be at by the end of 2023?
Chris Bennett: It’s hard to make predictions, because no one knows for sure what the future holds. There are things that can slightly move the needle rate-wise, but I don’t foresee anything drastic. The environment we are in is the environment we’re in. Unless any major events occur, I foresee interest rates staying pretty similar to where we are at now, maybe something slightly lower.
Consult a CrossCountry Mortgage loan officer
For those looking to sell their homes, renovate or buy a new home this season, the best first step is to connect with your local loan officer. Whether you are making short-term or long-term plans, your loan officer has access to a diversity of products and programs that fit your financial goals.
