Is the Housing Market Heading for a Slowdown?
Here’s what experts expect to see from the housing market in the foreseeable future.
In most areas of the U.S., the last month has brought a drastic change in the real estate market. While hot destinations like Raleigh, Charlotte, Denver, and Austin have ridden the wave of the pandemic-induced housing frenzy for years, many areas are finally seeing buyers ease off the gas. Now sellers and homeowners are wondering: are we heading for a slowdown, and if so, should we panic?
Interest Rate Changes
When it comes to the question of whether the housing market is finally slowing down, the short answer is yes. Offers are coming in more slowly than before, even in some of the stronger, more competitive U.S. markets. And the short answer as far as why? Mortgage rates.
Just as low interest rates served as a huge factor in the onslaught of buyers entering the market in 2020 and 2021, rising interest rates are now having the opposite effect. While the market has certainly seen higher rates, the comparative spike has shifted budgets drastically enough that some buyers have decided to hold off on their house hunting plans.
Supply and Demand
While the scramble for homes may be seeing a slowdown, this change doesn’t mean the U.S. is suddenly a buyer’s market. Local real estate markets vary, but in cities like Raleigh and Charlotte, demand still greatly outweighs supply. Nationwide, housing supply sits at about 3 million homes short of demand. As millennials continue to enter the housing market and professionals keep moving away from cities like New York and San Francisco in favor of buying instead of renting, that demand is expected to remain steady.
Considerations for Buyers and Sellers
Many experts predict a recession on the horizon in the U.S, and the housing market will likely continue to slow down. However, especially in popular areas like Raleigh and Charlotte where local economies are holding strong and even growing, this doesn’t mean it’s time to panic.
While homes may not appreciate at quite the rates they have for the last few years, they are also not losing value. The imbalance between housing supply and demand won’t level out overnight or even in a year — there’s too much catching up to do, and builders have only scratched the surface. Whether you’ve been considering buying, selling, or both, this may be the perfect time to get started.
Buyers can finally breathe a sigh of relief that competition is a bit less fierce — though North Carolina hotspots still remain in a solid seller’s market. Still, the slight improvement means it may finally be time to purchase a lot in your dream location and build a home that truly fits your needs and lifestyle there.
It’s still a great time to sell your home and upgrade, too. Depending on your home’s location, you may not see the frenzy of offers as soon as your listing hits the market, as homes did in early 2021. However, strategically priced homes with appropriate marketing are still bound to sell quickly and for great earnings. Working with a great realtor can help you price and list your home correctly.
In short, a recession on the horizon does not mean it’s best to hold off on your dream home. Recessions pass, homes are continuing to appreciate, and demand remains strong. Get started building the home of your dreams with Atmos!
