In this month’s real estate market update we’re going to discuss the topic that is driving the real estate industry right now and the topic that is on everyone’s minds…mortgage rates. So let’s get started.
Let’s look at the rate environment, going all the way back to the beginning of the year. We wrapped up the year with 3.1 percent in the average 30 year fixed. And we’ve sort of seen this quick and dramatic rise in interest rates over the first several months where we started to clearly plateau sometime around the third week in April. In the last several weeks since then, we’ve kind of moved horizontally versus up. That’s a good thing. We don’t want to see mortgage rates going higher as it eats into affordability, eats into the purchasing power that consumers have when they come to buy a home. What we can’t say is - have rates peaked? Unfortunately, no one has a crystal ball.
Are We In a Housing Market Correction?
As interest rates rise and as we see things happening in the real estate market, the question that starts to come up. Are we in a housing market correction?
Quick answer to that: no we are not. Why is that? Well, the technical definition of a correction of any sort is a decline of 10 percent or greater in the price of a security asset or financial market. Why is that? Experts are forecasting almost nine percent appreciation in residential real estate this year. So we are actually heading in the opposite direction of a market correction.
So, not a correction. According to Danielle Hale, the chief economist from realtor.com...
“The housing market is at a turning point. We’re starting to see signs of a new direction, but the ball is still in the sellers’ courts in most housing markets.”
We’re Coming out of two anomaly years in the real estate business, no doubt about that. But, the ball is still in the sellers’ courts. We’re still in the sellers’ market. There’s still more buyers than there are available homes for sale.
So What's Ahead?
Experts don’t believe the market is in a bubble or a crash is in the cards, like during the Great Recession. The nation is still suffering from a housing shortage that has reached crisis proportions at a time when many millennials are reaching the age when they start to consider home ownership. That’s likely to keep prices high because millennials are working through the peak home buying years. We know they are the second largest generation behind the baby boomers, just behind them just a little bit.
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 info@firstcoastrealtyinc.com