When interest rates drop and mortgage rates decrease during a strong economy, you’d expect to find a booming housing market. However, this isn’t the case as of now.
There’s no doubt about it, the economy is booming. But what’s different about the housing market is that prices continue to remain too high for many buyers. “Typically, when buyers remain on the sidelines, housing prices fall in response to lower demand. But that’s not happening at the moment because the homes on the market are priced higher than where people are willing or able to buy.” CNN Business
There are a few reasons this is happening:
- There is still a shortage on supply of new homes for sale.
- Developers have slowed down on building new homes due to a shortage of construction workers.
- High material costs due to tariffs have impeded the pace of building.
While those who are already homeowners are taking advantage of the mortgage rates and refinancing, it is still hard for buyers to justify the current market rates for purchasing a home, and they don’t seem to be dropping.
For housing market updates, trends, and advice/opinions, follow my blog at SanMarinoFineHomes.com.