Maybe you're getting mixed messages about the real estate market. Is it still hot, or is it cooling off? Let's understand the conflicting headlines.
The market is somewhat cooler compared with earlier in the year. However, it's still historically strong. For instance, the percentage of homes on the market that has posted price reductions is still lower at this point in the year than any comparable period other than 2020.
Another factor contributing to the strength of the market is that most homeowners have positive equity in their homes. In January, existing home prices were 14.1% higher than a year earlier. They were up 14.9% in August, steeper than 12 months before. Double-digit increases are not expected in 2022.
The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.1% from September 2021 to October 2021 and on a year-over-year basis by 1.9% from September 2021 to September 2022.
Housing demand still outpaces supply. However, there are some cautions. The Federal Reserve is on course to raise interest rates and cut monthly mortgage-backed security purchases in 2022. Either action or both will likely cause mortgage rates to rise. Higher rates can lead to fewer home sales, less price growth, and maybe even a price retreat in certain communities.
For sellers on the fence about selling, the window of opportunity may be starting to close. If it's time for you to make a move, you know who to call!