WHAT THIS MEANS FOR HOMEBUYERS
As homebuyers pull back from the market—or bail from home purchasing decisions—inventory levels will rise, and home sales volumes will fall.
But with mortgage rates more than doubled since the beginning of the year, buyers are faced with eye-watering increases in their monthly mortgage payments.
If that weren’t enough, the drop in rates between July and August, followed by the spike in mid-to-late September, means many buyers who made an offer on a home when rates were around 5.5% are now faced with a mortgage payment based on rates much higher.
The challenges homebuyers face in today’s market go beyond the dwindling affordability caused by high mortgage rates and home prices. The whiplash in mortgage rates between when homebuyers set their budget and when they make an offer is also making it extraordinarily difficult to plan ahead.
Taylor Marr
Redfin Deputy Chief Economist
The volatility will likely depend on the Fed’s continuing efforts to get inflation under control. If they succeed and inflation eases, mortgage rates should fall within 12 to 18 months.
That’s a bit of good news for buyers and sellers both.
