What’s going on in the housing market?

Increasing mortgage rates, high rent, low inventory– what the heck is going on in today’s real estate market? The New York Times’ Ronda Kaysen wrote a piece detailing the complex patterns that will help inform your strategy.

• Mortgage rates have nearly doubled, changing monthly costs for the same house. As Kaysen referenced, for a $500,000 home loan, the principal and interest would have cost the consumer $2,100/month in January. Today, that same loan would cost $2,900/month. Over the last two years, many homeowners took advantage of the low rates to purchase a house that was previously not within their buying power. Today, consumers are getting a reality check that the homes that were previously within reach may no longer be in their budget.
• While demand is down, home prices are unlikely to plunge in the long-term. Here in Pittsburgh, we’re beginning to see a little more inventory but there are still more buyers than sellers. Rest assured, as Rick Sharga, an executive vice president of market intelligence at ATTOM, a real estate data company said, “This is not 2008 all over again– we’re not looking at a housing bubble.”
• While mortgage rates have increased, the typical U.S. asking rent passed $2,000 for the first time and there’s no knowing when the soaring rents will end. This is causing renters to identify other housing strategies, like finding roommates. While Pittsburgh is adorned as an affordable city, we are not entirely immune to these trends.
• For sellers, it’s time to “reset expectations.” In Pittsburgh, the average days on market is 47 days so the era of multiple offers within the first day of being on the market may be behind us. This doesn’t mean that you won’t get full asking price, but it means the competition for buyers is cooling off.

A changing housing market doesn’t mean that your real estate goals are out of reach: it just means it’s time for a different strategy.

Want to learn how this affects your plans? Schedule a time to connect with Tenille today here, contact her at tenille.mettibowling@cbrealty.com, or call her at 412.407.7295.