Sharing with you my insightful interview with KPRC2 Houston.
I recently sat down for an interview with KPRC2 Houston. It was a fruitful conversation where we explored the significant impact of soaring mortgage rates on both buyers and sellers, highlighting the gridlock that has ensued. Today I’ll share what we discussed and shed light on some of the pressing matters in real estate.
The current mortgage rates are at record highs, ranging between 7.75% and 8.2%, a stark increase from the previous 2% to 2.5%. The Houston housing market is experiencing challenges with buyers hesitant due to high rates, and sellers unwilling to part with their homes at such elevated rates.
Mortgage rates had been below 3% for four years, and the sudden increase starting in June of the previous year caught many off guard. By September of that year, a significant spike led to a gridlock in the market, affecting both buyers and sellers.
Now, a year later, the market is at an all-time high not seen in two decades. Buyers are reluctant, and sellers are unwilling to compromise on prices. The inventory shortage persists, exacerbated by the aftermath of the COVID pandemic, causing homes to sell over list price with multiple offers, but only if they are priced right and well-presented.
"When rates do drop, a surge in demand is anticipated, leading to increased prices and bidding wars."
During the pandemic, many lived beyond their means, and the current surge in credit card debt reflects this. Homeowners, however, are tapping into their home equity, with over 50% having substantial equity. Some are choosing to sell, capitalize on their equity, and wait for interest rates to potentially decrease in the next few months.
The expectation is that interest rates might start to decrease in the first quarter, possibly continuing into spring. However, when rates do drop, a surge in demand is anticipated, leading to increased prices and bidding wars. My advice is for potential buyers to act now, negotiate, and take advantage of the market before interest rates decrease. Additionally, for those in debt, selling and moving to a more affordable place is suggested to rebuild reserves.
The current real estate landscape presents challenges and opportunities, with a focus on strategic decisions for both buyers and sellers in the face of fluctuating interest rates. If you have any questions about the market or anything else related to real estate, call or email me. I’m happy to help.