Home sales have been falling fast since interest rates rose last year. After a spree of house shopping and record-low mortgage rates, homeowners sit comfortably in 2023. They’ve got affordable monthly payments, a home that is (probably) bigger or better than their last one, and expect a potential recession sometime soon. So why would today’s homeowners give up all that security to buy in a hazardous market? Mark Fleming from First American has been trying to uncover the answer.
Mark serves as Chief Economist for First American, one of the United State’s leading title companies. Mark’s job is to predict and forecast the housing market, home sales, and buyer activity. And in 2023’s topsy-turvy economy, this is becoming a little more difficult. Mark has built a model to help predict home sales, looking at key factors like household formation, affordability, current mortgage rates, demographics, and more. And he’s got some interesting findings to share.
The days of low interest rates and property upgrading may be over. Homeowners are now staying in their houses for twice as long, holding off on buying their next home until favorable conditions arise. But, this creates a “prisoner’s dilemma” for home sellers and buyers. With most of the United State’s potential property inventory sitting in the hands of those who refuse to sell, we’re answering, “What happens next?” in this episode.
In This Episode We Cover
Home sales predictions and what happens when there is NO available inventory
Loose monetary policy and how low interest rates caused an affordability spike
Two critical factors that drive the market to soar or slump
Home turnover and why today’s homeowner is “locked-in” and refusing to move
The “prisoner’s dilemma” that’s caused the housing market to stagnate
A return to the “new normal” and what future homebuying could look like
And So Much More!
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Inventory Shortage Could Continue As Interest Rates Rise and Homeowners Feel “Locked-In”
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Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-112
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