A Window of Opportunity for Homebuyers
In recent months, mortgage rates have increased significantly, clearly affecting the housing market. Due to this shift in buyer demand and home sales, the market is experiencing a return to pre-pandemic levels.
While transitioning back to pre-pandemic levels isn't ideal, it isn't disastrous either. The housing market experienced some of its best years before the pandemic. In light of this shift, it is essential to compare today's market, not to the abnormal pandemic years but to the most recent standard years. This will enable us to see how strong it is today.
There is a moderating effect on the housing market due to higher mortgage rates.
The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. It's also a good indication of buyer demand over time. Here's a look at their data going back to 2017 (see graph below):
Here's a breakdown of the story this data tells:
2017 through early 2020 numbers (shown in gray) give a good baseline of pre-pandemic demand. The steady up and down trends seen in each of these years show typical seasonality in the market.
The blue on the graph represents the pandemic years. The height of those blue bars indicates that home showings skyrocketed during the pandemic.
The most recent data (shown in green) indicates buyer demand is moderating back toward more pre-pandemic levels.
This indicates that buyer demand is declining from its peak over the past two years, and the real estate frenzy is easing. This means buying a home after the pandemic should be easier than it would have been during the pandemic.
Home sales are slowing because of higher mortgage rates.
As mortgage rates started to rise this year, other shifts began to occur too. One additional example is the slowing pace of home sales. Using data from the National Association of Realtors (NAR), here's a look at existing home sales going back to 2017. Much like the previous graph, a similar trend emerges (see graph below):
Again, the data paints a picture of the shift:
The pre-pandemic years (shown in gray) establish a baseline of the number of existing home sales in more typical years.
The pandemic years (shown in blue) exceeded the level of sales seen in previous years. That's mainly because low mortgage rates during that time spurred buyer demand and home sales to new heights.
This year (shown in green), the market is feeling the impact of higher mortgage rates, moderating buyer demand (and, by extension, home sales). That's why the expectation for home sales this year is closer to what the market saw in 2018-2019.
How Can This Be Good News for You?
Homeowners and buyers alike have taken advantage of both factors to make a move or purchase a home. When home sales slow and demand moderates, housing inventory can grow, giving you more options.
Despite the pandemic, the housing market remains strong; it has simply eased off from the unsustainable frenzy it endured during its height. Do not let headlines about the market moderating or cooling scare you. You have a better chance of finding a home that fits your needs because of it.
Summary
Home-buying isn't easy right now, but there are more opportunities for those interested. Higher mortgage rates are causing a shift in the housing market, but the market remains strong. It may now be your chance to purchase a home if you've wanted to buy for some time but couldn't.
Curious about what options are available to you? Call OCoyne Properties today to find a home in this PNW wonderland!
Get in touch with me today at 541-218-7762 or send an email to mocoyne.realtor@gmail.com .