Monthly Archives: February 2022

Will the housing market slow down soon?

The answer to the question above is WE’LL SEE. Despite skyrocketing home prices, demand is still extremely high. This is evidenced by the sustained increase in sales over multiple months. Consumers still want to buy houses and live the proverbial “American Dream”. One would think that the presence of Covid-19 would have slowed things down, but we are now almost in the third year of Covid-19 and the opposite has been true. Demand is stubbornly higher than supply, with the average home continually selling above its list price for thirty plus consecutive weeks. One particular builder has indicated that its backlog of homes increased 26% in the quarter.

There may be some help in site, however. An increase in interest rates. Rates have edged higher recently but still remain near historically low levels. Mortgage rates could be increasing further though, in 2022 since the Federal Reserve has hinted that it could potentially raise short-term interest rates a few times this year to help combat inflation. This increase could ultimately put pressure on longer-term bond yields, which in turn, could influence the direction of mortgage rates.

So will the housing market slow down soon? WE’LL SEE.

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