By Julie Byrd & Erin Kelly
Realtors, Long & Foster Real Estate, Inc.
The housing market is influenced by the state of the economy. With so many economic developments recently, you may be wondering about the impact on the housing market. To keep you informed, we looked at a few factors that are currently affecting the real estate market.
Rising Mortgage Rates
The recent increase in mortgage interest rates—currently over five percent—are the highest they’ve been in more than 14 years, and these rates are expected to continue to rise throughout the rest of 2022. We have noticed that in some instances, these increasing rates are resulting in hesitant buyers.
Persistent Seller’s Market
It’s still a seller’s market, with low inventory of homes available; however, we are starting to see a shift in the amount of days properties are on the market and the amount of offers coming in. In past months, many homes were going under contract in less than seven days, but we are now seeing homes sit on the market a little longer. We are also seeing fewer offers on available properties—1 or 2, instead of 8 to 10—as had been common. Since real estate is hyper-local though, this trend varies in different areas.
Increased Job Openings
We’re experiencing an all-time high for job openings in the United States. As the job market heats up, employers will be competing for qualified candidates, which should push wages higher.
Inflation, however, is currently outpacing wage increases. But, as it stabilizes, higher wages should boost consumer buying power, helping minimize the affordability issues that come with higher mortgage rates and home appreciation.
The good news is that buying a home is an excellent hedge against inflation. While the amount you’re paying for food, gas, and materials has increased, locking in a 30-year fixed rate mortgage will keep your housing costs steady.
If you’re planning to sell your home while it is still a seller’s market, we would be happy to provide you with a comparative market analysis of your home’s value and guide you throughout the entire process. Alternatively, if you’re planning to buy a home, we can help you prepare, so you’ll be ready to make a winning offer. Our best wishes for a great July!