A Window of Opportunity for Homebuyers
Mortgage rates are much higher today than they were at the beginning of the year, and thatās had a clear impact on the housing market. As a result, the market is seeing a shift back toward the range of pre-pandemic levels for buyer demand and home sales.
But the transition back toward pre-pandemic levels isnāt a bad thing. In fact, the years leading up to the pandemic were some of the best the housing market has seen. Thatās why, as the market undergoes this shift, itās important to compare today not to the abnormal pandemic years, but to the most recent normal years to show how the current housing market is still strong.
Higher Mortgage Rates Are Moderating the Housing MarketĀ
The ShowingTime Showing Index tracks the traffic of home showings according to agents and brokers. Itās also a good indication of buyer demand over time. Hereās a look at their data going back to 2017 (see graph below):
Hereās a breakdown of the story this data tells:
This shows that buyer demand is coming down from levels seen over the past two years, and the frenzy in real estate is easing because of higher mortgage rates. For you, that means buying your next home should be less challenging than it wouldāve been during the pandemic because there is more inventory available.
Higher Mortgage Rates Slow the Once Frenzied Pace of Home Sales
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), hereās a look at existing home sales going all the way back to 2017. Much like the previous graph, a similar trend emerges (see graph below):
Again, the data paints a picture of the shift:
Why Is All of This Good News for You?
Both of those factors have opened up a window of opportunity for homeowners looking to move and for buyers looking to purchase a home. As demand moderates and the pace of home sales slows, housing inventory is able to grow ā and that gives you more options for your home search.
So donāt let the headlines about the market cooling or moderating scare you. The housing market is still strong; itās just easing off from the unsustainable frenzy it saw during the height of the pandemic ā and thatās a good thing. It opens up new opportunities for you to find a home that meets your needs.
Bottom Line
The housing market is undergoing a shift because of higher mortgage rates, but the market is still strong. If youāve been looking to buy a home over the last couple of years and it felt impossible to do, now may be your opportunity. Buying a home right now isnāt easy, but there is more opportunity for those who are looking.