A housing market correction is defined as a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in a value from a recent peak.The housing market is in a first phase of a slight shift mode, which is considered to be a housing market correction since the pandemic began a few years ago. The super low interest rates could not last any longer.
This is not considered a market crash, just a simple and now aggressive reset on the third. Curbing inflation is already on the horizon starting June 2022 since the historic spike in interest rates of .75%. See link /INFLATION---32819---32836---Dr-Phillips-6-22829.html
With this being said, many first time buyers all over the nation could simply afford to finally purchase a home. Being that so many homes were purchased by the first time buyers and investors, this dried up the housing market.
Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy. History shows that employment costs of bringing down inflation are likely to increase with delay, as high inflation becomes more entrenched in wage and price setting.
The pandemic truly contributed to this because many workers could work from home and with the low mortgage rates, they could afford to relocate to sunny Florida, purchase a home and work from home.
With a combination of all this going on, this created a housing shortage in America. This led to record high demand and record low supply, this included rental properties that monthly rates skyrocketed.
Since June 2022 the rates spiked upward three times and through December of same year. The third spike 3/4% caused many not to qualify to buy a home. We believe this is where the shift and first phase of the housing market correcting itself back to pre-pandemic levels. Again this is a turning point in the housing market correction phase. As of June 2022, plans on the table are for two more interest rate hikes. Banks are now getting creative on how to qualify buyers for home purchases. With interest rates on the rise, this forces home prices to come down so that the affordability of home buying is in sync.
Millennials nationwide were super excited during this phase to finally purchase their first home based on low mortgage rates. As for now the boat of super low mortgage rates has sailed on and won't be back for some time. Many can still qualify, but for a much smaller home. Serving Dr Phillips and Central Florida. Trust your local home advisor and stay connected with me at 850 496-6412 or email firstname.lastname@example.org to steer you in the right direction. Click here to know more about Kevin Strawter /ABOUT-KEVIN-STRAWTER-P-A---MRP--GRI--ABR-6-14330.html