As 2022 moved along, the residential market seemingly began to tilt toward buyers after a sustained period in which inventory was lower than demand. Rising interest rates, however, have put all in doubt.
Consider this quote from Doug Duncan, Fannie Mae’s chief economist. “…the rise in rates is having the Fed’s desired effect on housing, as house price growth began to slow in June. We expect the slowdown in housing to continue through 2023 as affordability constraints mount for potential homebuyers, and considering, too, that refinance activity has been significantly curtailed by the rise in mortgage rates.”
Overall, real estate economists are not bullish. My hope is that if the Fed’s actions can curtail inflation by 2022’s end or early in 2023, then perhaps the rate hikes will stop and mortgage rates will decrease. If that does not happen, 2023 may indeed be a tough year for our industry.
Read more in our current issue of ASSURANCE Fall Winter 2022 2023
