There are two major factors impacting the housing market today.

One of the biggest challenges we're dealing with in this market right now is the lack of inventory or available housing for people to buy. Mark Fleming, the chief economist at First American, says it this way: "Two dynamics are keeping existing-home inventory historically low—rate-locked existing homeowners and the fear of not finding something to buy.”

Let's take a look at those two things. First of all, we have rate-locked homeowners. What is a rate-locked homeowner? According to the Federal Housing Finance Agency, most homeowners who have mortgages currently have interest rates below 4%. When homeowners have interest rates below 4%, and current interest rates are at 6% and approaching 7%, it causes them to step back and opt to wait for those interest rates to come back down. Jumping from less than 4% to 6% or approaching 7% adds a lot to not only your monthly payment but also to what you'll be paying over 15, 20, and 30 years on your mortgage.

“There are a lot of different factors that play into all of this.”

The other thing that we must consider is the fear that if a homeowner does sell their home, can they find the next house to buy with the low inventory? Homeowners are concerned that if they sell, and yes, they will be able to sell quickly in this market, they won't be able to buy because the right house isn't out there. They're also taking a step back. They're opting to wait until inventory goes up, but what does this mean for all of us right now?

What is the bottom line? The bottom line is that until mortgage interest rates start coming down again, and projections are that maybe by the end of the year, we'll be around the 5.5% to 5.75% range, we won't start seeing the inventory levels increase all that much. By the end of the year or going into next year, we may start seeing those inventory levels increasing and the interest rates decreasing, which hopefully will help stabilize the market once again.

Now, there's a lot of information, and there are a lot of different factors that play into all of this. If you would like to have a conversation about your specific situation and what it would look like for you to sell or buy in this market, I would love to have that conversation with you. Please feel free to reach out. You can call me at (269) 350-5514.