Thursday, August 4, 2022 / by Laura Larson
However, the return to pre-pandemic levels is not a terrible thing. The property market really experienced some of its best years in the years prior to the pandemic. To demonstrate how the current housing market is still robust as the market goes through this transition, it is crucial to contrast today with previous normal years rather than the abnormal pandemic years.
Higher Mortgage Rates Are Moderating the Housing Market
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.
- From 2017 through early 2020 numbers 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 home showings skyrocketed during the pandemic.
- The most recent stats indicate that buyer demand is moderating back toward pre-pandemic levels.
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. Again, the data paints a picture of the shift:
- The pre-pandemic years establish a baseline of the number of existing home sales in more typical years.
- The pandemic years exceeded the level of sales seen in previous years. That’s large because low mortgage rates during that time spurred buyer demand and home sales to new heights.
- This year, the market is feeling the impact of higher mortgage rates and that’s 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.
Why is this news all good for you?
Both of those elements have created a window of opportunity for people trying to buy a property and for homeowners looking to move. Housing inventory is able to increase when demand moderates and the rate of home sales lowers, giving you more options for your home search.
Therefore, don't be alarmed by stories that the market is slowing down. The housing market is still robust; it's only starting to cool off from the uncontrollable frenzy it experienced during the height of the pandemic. This is good news. It gives you fresh possibilities to locate a residence that satisfies your needs.
The housing market is shifting because of higher mortgage rates, but the market is still strong. If you’ve 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 isn’t easy, but there is more opportunity for those looking. Connect with Laura Larson Now!