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Housing Trends Today and Tomorrow

As we step into the beautiful autumn season, it’s a great time to

provide you with an update on the latest trends and future

predictions for the housing market. We’ll delve 

into many factors determining the real estate market. By

definitive metrics, the housing market is now in a recession. Many experts

feel this will include all sectors in the coming months

due to global issues that ultimately will have an effect on us. The

good news is that it is not expected to be very severe nor very


1. Demand

  • Current Trends: Despite everything, the market is still robust. There

are many buyers evidenced by the fact that we still have multiple

offers on mainstream properties in our area. There is evidence that it is softening 

just slightly as sellers are a little more negotiable and willing to do some repairs though. 

Low inventory levels, pent up demand coupled with a growing population of millennials 

and Gen X’ers determined to own their own home (some with parents help), are driving competition among buyers.

However, the inventory is starting to creep upwards and prices have started to level off a bit as of the past few weeks

  • Recent Developments: The shift towards remote work has expanded the

geographical boundaries for potential homebuyers. Suburban and rural areas are

witnessing increased interest, while urban centers remain attractive for those seeking

proximity to amenities. Many are relocating to mid-America and the South where home

prices are considerably lower.

  • Future Predictions: Experts anticipate sustained demand, especially in

suburban and rural markets. However, the continued lack of new housing starts over the

past several years has partially created the shortage we now are experiencing (starting

with the recession of 2008, it has continued through today). 

Also institutional investors buying up 13% of available homes

has not helped. The severity of this shortage will not be made up easily.

2. Interest Rates

  • Current Trends: Interest rates had been at historic lows for some

time due to government intervention. This low rate has spoiled many buyers who are

now disenchanted, hesitant and/or priced out of the market. At close to 8%’s now, it is

keeping many sellers from selling and having to get higher mortgage rates

on their next home, creating even lower inventory.

  • Recent Developments: Buyers are starting to hesitate on

purchasing due to higher rates, causing inventory to rise slightly and

prices to soften a bit.

  • Future Predictions:

Mortgage rates are poised to tick up slightly to 8% or more soon, according

to experts. This will price many buyers out of the market and may affect

the purchase of multi-family units as investors will not be attracted to them

unless prices are reduced to reasonable cap rates.  Lenders are also starting to shy away 

From multi-family loans.

3. Affordability

  • Current Trends: Affordability challenges persist, particularly in

high-demand markets. Rising home prices have outpaced wage growth for

many, leading to concerns about homeownership accessibility. Parents

are stepping in to help with gifting down payments, etc. so that the

younger buyers can break into the high costs of homeownership. Many

people are also deciding to just wait it out for now hoping that in the

coming months or years the interest rates may drop. If prices continue to

rise due to demand and shortages, however, this may not increase their

affordability as hoped.

  •  Recent Developments: Local and state governments are

implementing various initiatives to address affordability issues, such as

first-time homebuyer incentives and affordable housing programs. There

are incentives for building lower cost housing such as condos and new developments

have requirements to be designed with smaller lots to increase infill. Also the

Feds just lowered the down payment requirements for owner-occupied

multi-family purchases so these are more accessible.

  •  Future Predictions: Affordability is expected to remain a critical

issue, especially in densely populated metropolitan areas. Buyers may

need to explore different financing options or consider other emerging

markets to find more affordable housing solutions.

In conclusion, the housing market is likely to continue to experience a shortage of

homes for many years to come which will affect homebuyer affordability.

As always, we are here to assist you with any questions or real estate needs you may

have. Please don’t hesitate to reach out to us for personalized advice and guidance.

Thank you for entrusting our team as your real estate partners. Wishing you a wonderful Fall


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