Real Estate Marketing & Beyond
The housing market has its ups and downs in any economic era, but today we face lower demand for mortgages than has been seen for over two decades.
This is a tricky state of affairs for various reasons, so let’s discuss how we’ve reached this point and where we go from here.
With rising interest rates implemented as an inflation-fighting measure, it’s no surprise that people are less willing to take on debt at this point in time.
There has long been concern over the cost of living in cities, and people who were already feeling the pinch before the current crisis are doubly in danger of being unable to afford to pay the bills, let alone consider the cost of keeping up with the interest alone on a mortgage.
Of course on the flip side, consumers are arguably in a better position today than at any point in the past. Thanks to the competitive nature of the market, there’s more choice and better value to be gleaned. Products from loanDepot mortgage lending, for example, are customer-focused and built to save you money, rather than leaving you in financial dire straits.
The other aspect which is creating consternation at the market is the fact that property prices remain robust.
Record levels of demand and the previously all-time-low interest rates of the past couple of years meant that sellers were able to command much more for their homes, and buyers had little choice but to put up or shut up.
There’s no denying that we’re currently experiencing a slowdown in house price growth, but that’s not saying much, because even the most pessimistic specialists are not predicting any improvement in affordability.
One element which industry observers agree on is the idea that stability will eventually arrive, both for home prices and mortgage rates.
Many people have been reluctant to commit to a mortgage in recent months not because of affordability, but because of volatility. If rates can leap from 3 percent one day to 5 or 6 percent the next, pulling the trigger on any loan product wouldn’t seem savvy.
When the fluctuations have leveled off, it will be easier for buyers to take stock and determine whether or not they could afford a mortgage at the current average rates.
Indeed there is a sense that we’re over the worst of it already, and that calmer waters lie ahead, even if the conditions are far from ideal.
Before the rate hikes and inflation issues, the major problem for the housing market was how quickly it was moving. In the most popular regions, homes for sale would be snapped up very quickly, meaning that house hunters didn’t have much choice and felt compelled to act quickly, even if they weren’t certain about their decision.
With the potential slow-down of the pace of the market, choice will increase and time for choosing will expand as well.
For sellers, this will mean having to wait longer to get offers through the door, which is arguably a downside. But for those aiming to get onto the property ladder for the first time, it will be welcome to have some breathing room.
The future of the housing market is looking less hectic and more considered than at any point in the recent past, and that has to be a good thing, even if affordability is still an elusive concept.
