Friday, June 17, 2022 / by Laura Larson
The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low mortgage rates and millennials reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis.
This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – not a crash nor a correction. “The housing market is at a turning point. . . . We’re starting to see signs of a new direction, . . .”
And since 2019 was such a strong year for the housing market, this helps show that the market isn’t crashing – it’s just at a turning point that’s moving back toward more pre-pandemic levels.
Headlines are also talking about how existing home sales are declining, but perspective matters. The pandemic numbers beat the typical year of 2019 home sales. And according to the latest projections for 2022, the market is on pace to close this year with more home sales than in 2019 as well.
It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. First American sums it up like this: “. . . today’s housing market looks a lot like the 2019 housing market, which was the strongest housing market in a decade at the time.”
If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Reach out to Laura Larson if you have any questions about our local market and what it means for you when you buy or sell this year.