Lower Interest Rates vs. Economic Uncertainty How will coronavirus affect the housing market? The answer likely depends on two questions: 1) which Buyers?; and 2) which segment(s) of the housing market — specifically, which price points? So, at the lower end of the market, especially in the Twin Cities, there remains an acute shortage of...Read More
Short-Term Forecast Twin Cities real estate pro’s are anticipating a slow-down from this Spring’s torrid pace sometime later this Summer. Why? a. Rising interest rates; b. Projected low levels of inventory; c. Declining home affordability, especially in the market’s lower rungs most popular with first-time Buyers; d. Cumulative agent exhaustion. Correct answer: all of the above. Minus...Read More
Affordability’s Three “Ingredients”: Housing Prices, Mortgage Rates, & Employment Don’t rising home prices make homes less affordable? In general, yes. The exception is when interest rates are falling faster than home prices are rising — the case right now — and wages and employment are improving (also true). From 4.6% to ???? So, from a...Read More
Lower Rates, Yes, But Higher Prices (& Fewer Choices) First, a caveat: to home Sellers, higher home prices are an unalloyed plus. More money at closing is . . . more money (Realtors paid commissions like it, too). And lower interest rates are catnip to Buyers — at least ones financing their purchase. But at what...Read More
