In this month’s real estate market update I want to address several topics that are on everyone’s mind:
is the market going to crash
where things are heading for the rest of the year
So let’s get started.
Many homeowners were affected negatively by the Covid-19 pandemic and had to enter some type of loan modification program. Thirty-seven percent in the green area were paid in full. Forty-four point six percent, the blue shaded area, went through some kind of work out with their bank, either a modification, a rate and term refinance or a deferral and have no issues. That leaves only 18% that are still in some sort of trouble. This is not going to have a huge impact towards a crash because people have options today especially with the increase in home value. So in short, no we are not heading for another market crash
The bigger question right now is what’s ahead? I think many people right now asking, what is the rest of this year going to hold? Home prices are going up. Interest rates are going up. The most recent updated home price forecast from the seven forecasters that we watch, is an average of 9% appreciation. Many people are asking are homes going to lose value later in the year? We started off the year at about 5% appreciation and are projected to finish between 8%-10%.
With rising interest rates, affordability is really on everyone’s mind. This chart is the change in mortgage payment at different interest rates going back to January of 2021. This is based on a loan amount of $300,000 principle and interest only. In January of 2021, when mortgage rates were at historic lows, a typical mortgage payment was about $1,200. Fast-forward to where we are today in this rising mortgage rate environment, with interest rates around 5.5% where experts projecting, that mortgage payment jumps up to over $1,700. So if you’re talking about $1,200 to $1,700, that’s roughly a $500 difference. And that’s putting a lot of concerns in people’s minds, not only is housing but everywhere else we see rising costs like the gas pump, grocery store, etc. The main take away, the longer you wait, the more it will cost.
So What Does This Mean For Buyers and Sellers?
So what does all this mean? With interest rates rising buyers cannot afford to wait any longer or you could get priced out of the market. Let First Coast Realty and their team of network individuals make sure your dreams of homeownership become a reality.
To the sellers out there yes the market is strong but the indicators show we might have reached the peak of the seller’s market. Now is the time to sell. Call First Coast Realty to receive a complimentary Broker’s Price Opinion.
Whether you are looking to buy or sell, First Coast Realty would welcome the opportunity to earn your business. Feel free to reach out to us on Facebook or Twitter and we would be happy to assist you in getting the ball rolling. Or, to talk to a qualified, experienced agent call/text today 904-494-8408 or email firstname.lastname@example.org