September 2nd, 2022 11:57 AM by Andrew Walter May CEO
The Future of Housing - Everyone's an Expert but here are the facts:#1 - Housing starts are down 25+% from April to July 2022. Seasonally adjusted this is still down 10% since June 2020.#2 - Just about every month over the last 66 months, housing prices nationally have gone up; including every month this year that data is available. Home prices are inflating still.#3 - Home sales are down 38% from Jan 2022 to June 2022 nationally.#4 - Inventory nationally is 10.9 months. This is a normal market, but your market will vary. In the Triangle we are all the way up to 1.5 months (this is still very tight). Of course, the headlines read inventory up 87%. That's just to scare you. 1.5 months of inventory is a sellers dream.#5 - Mortgage rates are up from last year, when some country's rates were actually negative (they'd pay you to take their money). That was last year. This year, they are up and right now they are around 5.375% with 1% origination point (this is not an offer). This is better than when rates were at 9+% back in the inflation 1980s.The above are facts. Where does this take us? First, there is a nationwide housing shortage for materials, workers, houses. Second the economy is super strong in areas like Oil, Tech (certain tech), Chips, EV cars, etc. With the fall off in new construction the multiplier effect should hit full throttle in Q123 - just in time for the new housing purchase market.I have said that home prices will start to recede in 2022 (they are still positive), and in 2023 we're in for some markets to shrink in terms of pricing. Then, in 2024 we will see a significant shift to higher spending to prop up the economy as it's an election year.We all know in election years, the Feds pump money to keep the economy looking rosy. We have next year, 2023, to worry about with certain housing markets that don't have job growth. Other than that, it's 2025 that I'm worried about for home price declines - if they come.ADRMortgage.com. Andy May #103418. Andy May Group, LLC #88010. 919 771 3379. Equal Housing Opportunity. 8522 Six Forks Road, Suite 201, Raleigh NC 27615. Of course, disclosures may be found at the website at the beginning of this paragraph.