Rising rates might finally be slowing down some parts of the housing market, according to the latest data from Altos Research…(Altos)
Inventory, it seems, may have finally turned the corner. Available inventory of unsold single-family homes rose 2% this week to 253,000. However, Mike Simonsen says don’t expect a big wave anytime soon…
- “…to get back to any level of inventory we consider normal, I’d expect that we need multiple years of higher rates. And maybe that’s what we’re in for. Inventory gradually climbing each year, the reverse of the last decade.”
While inventory levels are showing signs of a slight slow down, prices are not. The median home price in the US hit $400,000 for the first time ever. Simonsen believes this will number will continue to rise till mid-summer…
- “My suspicion is that this year, despite rising rates, will follow that pattern. $430,000 or $440,000 by June. Keep watching each week to see if that holds.”
Any signs that the housing market is cooling, even slightly, is a good sign indeed. However, as Altos clearly shows, we are far from a cooling market. The only thing worse than an overheating market would be a crash. A way to avoid both is to slowly cool off the market and it looks like 5% mortgage rates might finally be the ingredient to start that process.