Interest rates have jumped from the low 3’s to the low 6’s just this year. Principal and interest payments have jumped over 40% for many prospective home buyers. Many homebuyers have now been pushed to the side while more and more sellers try to move their homes. As a result of the sudden change, the housing market is truly in a recession and it will be creating more opportunities for many future home buyers.
Go back to the first of this year and many prospective home buyers were hard pressed to find a home to purchase. Many were facing a home seller as one of several offers. It made the price of a home increase more and more as prospective buyers offered higher and higher prices. That has all changed as interest rates have surged higher.
According to Realtor.com, the average day on market for a home in August 2021 was 37 days. In August 2022, that number has jumped to 42 days and is expected to climb even higher in the coming months. In some markets the number of homes on the market has surged. This is starting to force downward pressure on home process for many sellers trying to get their home sold.
Where does it go? Many housing markets could see price declines of at least 20%. That means a home priced in January 2022 of $500,000, could drop in value to $400,000 in the not so distant future. That is a housing crash.
For many sellers, this market is really rough and it could be very difficult to sell your home unless it has good value. For prospective home buyers, you could see many new opportunities that have not been seen in several years. It is a change in fortune that has just happened in only a few months.
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