Rising inflation, soaring home prices, and increased mortgage interest rates have combined to cause a slowdown in the U.S. housing market. To help quell inflation, which reached 8.6% as of last measure in May, the Federal Reserve raised interest rates by three quarters of a percentage point in June, the largest interest rate hike since 1994.
Higher prices, coupled with 30-year fixed mortgage rates that have risen sharply, have exacerbated affordability challenges and rapidly cooled demand, with home sales and mortgage applications falling sharply from one year ago. As existing home sales continue to soften nationwide, housing supply is slowly improving, with inventory up for the second straight month. In time, price growth is expected to moderate as supply grows; for now, however, inventory remains low and buyers are feeling the squeeze of higher prices all around.
Today's market really feels like it's going back to what it was before the pandemic (normal) with less crowded open houses, fewer private showing requests, longer days on market and fewer offers on new listings. Inventory continues to be the major obstacle in the San Diego County housing market. Most people who own their houses now have mortgages that are fixed at rates lower than the prevailing interest rate which is preventing them from listing their home and moving to a new home at a higher rate. Older residents who have owned their homes for 20+ years have so much capital gain in their property so rather than marketing their home they are staying put and not bringing those much needed homes to market.
There are few times when we see a market that is great for both Sellers and Buyers, but we are in one now. It still remains a Seller's market but Buyer's don't feel as rushed or pressured to make an offer immediately thus longer market times. Many predict the Federal Reserve will raise interest rates again by two to three quarters of a percentage point in their upcoming July meeting.
Summer has distractions but it is always best to have a plan in place. Please contact me to go over what options are available to you, your friends or family whether looking to sell or buy.
Higher prices, coupled with 30-year fixed mortgage rates that have risen sharply, have exacerbated affordability challenges and rapidly cooled demand, with home sales and mortgage applications falling sharply from one year ago. As existing home sales continue to soften nationwide, housing supply is slowly improving, with inventory up for the second straight month. In time, price growth is expected to moderate as supply grows; for now, however, inventory remains low and buyers are feeling the squeeze of higher prices all around.
Today's market really feels like it's going back to what it was before the pandemic (normal) with less crowded open houses, fewer private showing requests, longer days on market and fewer offers on new listings. Inventory continues to be the major obstacle in the San Diego County housing market. Most people who own their houses now have mortgages that are fixed at rates lower than the prevailing interest rate which is preventing them from listing their home and moving to a new home at a higher rate. Older residents who have owned their homes for 20+ years have so much capital gain in their property so rather than marketing their home they are staying put and not bringing those much needed homes to market.
There are few times when we see a market that is great for both Sellers and Buyers, but we are in one now. It still remains a Seller's market but Buyer's don't feel as rushed or pressured to make an offer immediately thus longer market times. Many predict the Federal Reserve will raise interest rates again by two to three quarters of a percentage point in their upcoming July meeting.
Summer has distractions but it is always best to have a plan in place. Please contact me to go over what options are available to you, your friends or family whether looking to sell or buy.
Ben Anderson
License DRE# 01369906
Broker DRE# 01767484
1111 Prospect Street, Suite 100, La Jolla, California 92037
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1111 Prospect Street, Suite 100, La Jolla, California 92037
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