July 19th, 2023 2:33 PM by Andrew Walter May CEO
Nearly 1 in 4 American homeowners have an interest rate below 3%. Another 33% paid cash for their home. That's close to 60% of Americans pretty much unaffected by rising mortgage rates.
That tells me, only 1 out of 3 homes might be sold for purposes of rates rising too quickly. There's nearly 80 million homes in the US. 24 million represent the 1 out of 3 that aren't mortgage free or mortgage insulated (less than a 3% rate). By 2013 nearly 15 million homes had gone into foreclosure or received a loan-mod. through our last recession (2009-2013).
We are to believe that this price run up we've experienced over the last 5 years is going to pop. Slow, yes. But pop? No. Not even close. Past blog/newsletters have spoken to the lack of new home construction (about 5 million short of demand).
Bottom line is that this Pundit (credentialed out) says, home prices will rise for at least the next two years. I think we'll see 15% home price increases (in total) in the next 2-3 years. Remember the supply chain issues will increase pricing too, along with labor shortages. Those Ivory Tower Pundits don't see what it's like in the trenches and rely on back-testing data. Try predicting the future, not testing the past. Home Prices are heading higher in the hot job market areas of the country. That's not to say that country-folk in the boonies won't suffer - they almost always do. But Single Family (not condos) housing will continue to crush it through 2024 on price alone (HIGHER).