Housing Market Shift
Everyone wants to know how the start of the housing market shift will affect current home values. Inman News recently reported on the current real estate market shift. They also remind us that a housing market shift is not the same as a housing market collapse. Why is this housing market shift finally occurring?
First, the Fed has changed its interest rate policy on federal funds rates and quantitative easing. Record low-interest rates have increased by 2% this year.
Second, Fannie Mae is projecting an 11% drop in home sales this month. The monthly home sales decrease happens because of a lack of affordability and supply.
Thirdly, both homebuilding and home sales nationally are beginning to slow down.
Matt’s Housing Market Shift Prediction
I believe we will see home value appreciation cool to a more normal real estate market at 3% to 5% annual appreciation over the next 12 months nationally. Some housing markets will lose value, while others will rise above the national average. I believe Huntsville will see appreciation house rates above the national average.
Long term, I see another crazy cycle of double-digit appreciation in the next couple of years. Why? Because, as mentioned in point three, home builders are slowing down the rate of building. We still have this 5.5 million home deficit in this country, which is not going away. Plus, once inflation is under control and rates begin to decrease again, you will find that buyers who excite the market will also create another feeding frenzy.
My advice to buyers is this: Don't. Wait. Lock in your prices now and then refinance if and likely when rates become more favorable.Posted by Matt Curtis on