The Biggest Challenges Facing the Housing Market

There are two big challenges that are making the housing market less desirable for both sellers and buyers. 

The first challenge is mortgage-locked homeowners. This happens when sellers have a current mortgage rate that is lower than what current buyers can get. According to the Federal Housing Finance Agency (FHFA), the average interest rate of current homeowners with mortgages is less than 4%. While homeowners that are looking to buy houses in the housing market right now are only being offered mortgage rates above 6%. That rate discrepancy is causing people to hold onto their homes - - even when they may no longer meet their needs - -  because they don’t want to have a higher mortgage rate for their new home. Mortgage-locked homeowners are less likely to get into the housing market which is creating a shortage of homes for sale on a market at a time when the market is already seeing a shortage.

This leads to the second challenge - - sellers that are worried that they will not be able to find a new home on the current market once they sell their current home. With a shortage of homes in the market, homeowners looking to sell in today's market are nervous about where they will live if there is a shortage of houses available to them. 

In a previous blog – New Build or Existing Home -- we talked about options that are available for homeowners. If sellers are uncertain – which they are – it’s important that they go over all the options that are available, especially those with companies offering builder concessions.

These challenges are making the housing market look less appealing for both sellers and buyers right now. That said, as mortgage rates are expected to fall as the year progresses, look for the housing market to come back into balance while keeping an eye on all your house buying - or building - options.