Is the Housing Market Both a Seller’s and a Buyer’s Market?
The pandemic hit and the housing market went crazy with buyers. In fact, many potential home buyers felt desperate and defeated due to all cash offers and multi-bidding wars. Those in the industry say that this is not the case anymore as the market is starting to become an even playing field.
“Those moments of…..there are 20 offers coming in are gone now. Buyers can take a bit more time . The buyer has a little bit more power or control on their side, ” says Jay Farner with Rocket Mortgage.
This is the 10th month in a row that home sales have dropped due to the rise in the mortgage rates. This has been the longest decline in home sales since around 1999. The market is not as hot as it was during the pandemic for sellers, but still is not a buyer’s market either due to the still historically low housing inventory.
“I’d say it’s an even market. A few years ago, it was clearly a seller’s market. We were doing verified approvals, people were getting a full underwrite within 24 hours to ensure they could present almost like a cash buyer to make an offer on that home. Now, they have a bit more time. They have more homes they can look at…..We’re not seeing 15 offers on one home,” replies Farner.
Even though the home prices are slowing down, they are not dropping. Since the demand is decreasing a bit, so is the supply. Higher mortgage interest rates have caused a slump in the market due to high inflation. The 30-year fixed at the week ending January 12 was around 6.33% which was down from last fall but up from this time a year ago.
“A recession here is on the horizon. People are changing their spending habits, credit card debt is rising, savings and bank accounts are dropping. All of those things tell me that we’ve set the table for a recession here in 2023,” says Farner.