Is It Time to Buy A Home or Get a Puppy?
Barbara Walter’s said, “Motherhood is tough. If you just want a wonderful little creature to love, you can get a puppy.”
I wonder if Barbara would mind me modifying her quote. “Buying/selling a house is tough.” It has always been tough. Sure, there have been outlier events. For buyers it transpired in 2005 – 2006. Lenders showered money on unqualified borrowers like confetti at the Super Bowl. For sellers it took place two years ago: two days on market, multiple offers, home inspection waivers and other extraterrestrial induced hysteria on buyers’ brains caused some to think this was the new normal. Hardly.
Historically, nationwide, Mother’s Day used to mark the starting line for real estate racing. Move out after school is out. Move in before school starts. This year, it seems, no one is moving in Austin.
Ivy, do you see any portending movement? Some. Let me point out five minor tremors.
#1: Unlike much of the nation, we have adequate inventory. Among the country’s largest 100 housing markets, just one is back to pre-pandemic inventory levels according to Realtor.com: Austin. Buyers have options.
#2: On Monday, Bank of America published its eighth annual millennial housing survey. In the report, “two-thirds of the survey’s respondents are still set on buying a home and say they’ll likely do so within the next two years.”
#3: Currently, most institutional buyers have paused purchasing new inventory. One reason is mortgage rates. Lenders are charging higher rates to institutions than they are to individuals. Interest rates on “floating” loans offered to institutions like Yieldstreet and Invitation Homes currently stand at 7% to 8%. Thus, competition from corporate America brings a welcome relief to present buyers.
#4: On Tuesday, Fannie Mae (the leading source of mortgage financing in the United States) published its “Home Purchase Sentiment Index.” The synopsis? “Would-be home buyers are more optimistic about the housing market as they believe mortgage rates will decrease in the coming weeks and months. In April, 22% of consumers polled said they expect rates to do gown, compared to just 12% in March.”
#5: Among the 27 major housing forecasters, 23 expected national home prices to fall in 2023. However, their gloomy anticipation has yet to materialize except for those cities where prices rose most in 2020 – 2022. The result? New forecasts. For example, Fannie Mae’s original forecast: Decline 4.2%. New forecast: Decline 1.2%
What might these five data points convey?
Most likely a “hurry up, wait and see” climate. Buyers, who are in the driver’s seat, find themselves facing improved conditions but may not recognize them. For instance:
More Austin inventory means more options from which to choose.
At the present time, institutions are sitting on the sidelines.
The so-called housing crash is failing to fall. The fear of buying at the top of the market is subsiding.
Meanwhile, Millennials remain committed to homeownership despite the obstacles and consumer sentiment is gradually improving.
“Motherhood is tough,” said Barbara.
I say, “Buying/selling a home is tough.”
And may I also add, “It is absolutely worth it.”
Which one, you ask? “Both.”
I have been a mother for four decades and a realtor for two. I guess you could say I am qualified and I would love to help you navigate this unique season. Click here to connect with me. I look forward to serving you!