Is the housing bubble about to burst? Lets look at the numbers:
1. Average 30 year mortgage rate is at 6%. The last time the average 30 year mortgage rate hit 6% was 2008.
2. Mortgage rates have doubled over the last 6 months. The last time mortgage rates doubled this quickly was in 1981. There was a recession in 1981.
3. Mortgage demand, a leading indicator of the strength of the housing market is at its lowest rate since 2001. There was a recession in 2001.
4. Housing affordability? The last time houses were this unaffordable was in 2007.
5. Housing inventory? On average, housing inventory is up 17% nationwide year over year. In many cities housing inventory is up over 100%.
First, housing inventory rises. Then housing prices drop. The cities with the largest, fastest rise in inventories will trigger faster prices drops in their respective states. But, these price drops will inevitably spread to most cities and probably every state in the near future.
Our best guess is that houses priced over $500,000 will see price drops at some point during the 2nd half of 2022. More affordable houses priced under $500,000 will see significant price drops in 2023.
We hope this housing analysis helps. For all issues concerning real estate, mortgages, debt, foreclosure, and bankruptcy contact Florida Consumer Lawyers.