The current state of the market
When looking at the current state of the market, consumers are locked into wait-and-see mode. That is unless there is an immediate need. Most consumers are no longer moving for the extra bedroom or garage stall. It’s the relocation, hardship, first-timers, and downsizers making up the current buyer pool. These consumers are less affected by rates. Rates are the majority stakeholder in today’s real estate conversations. “85% of homeowners have an interest rate far below today’s level,” says Business Wire in an article from September. The article goes on to say, “With rates now at the highest since the 2008 financial crisis, some of those homeowners are discouraged from moving because selling their home and buying another could mean giving up their low mortgage rate and taking on a larger monthly housing bill.”
Home Inventory
So, will this cause inventory levels to continue to decline? The Pomerleau Team’s (www.pomerleauteam.com) hunch is no! At least not as long as interest rates keep the buyer pool at bay. For every one percent interest rates go up the market loses about 10-15% of the buyers. The decreasing buyer pool is what will drive up the monthly supply of homes, with 6 months of inventory being a balanced market. To put it another way, the monthly inventory of homes will likely stay somewhat steady, but months of supply will increase.
If you are looking to buy or sell it will be more important than ever to find a real estate company that has navigated these markets before. In a previous article on www.residemn.com dated October 10th, 2022 The Pomerleau Team lays out the foundation for what to look for. Link below!
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