We need to address the elephant in the room. The reality is that buyers are facing a massive shock when applying for mortgage relative to what they could have paid just six months ago. But the great question is, does it means that house prices are due for a crash?
Everyone would expect that higher interest rates would have a negative impact on the housing market. But when there’s low inventory involved than the scenario totally changes. We can all agreed that the market is usually ruled by 4 pillars: supply and demand, affordability and credit availability.
Those first two, we kind of think they’re the larger structural kind of underlying tides of the housing market. Affordability and availability determine the shorter-term changes to prices to activity. If we look at housing affordability over the past three months or over the past year even, we’ve never seen affordability deteriorate this quickly in the housing market.
To learn more, listen to the podcast with Morgan Stanley housing strategist, Jim Egan on: https://www.bloomberg.com/news/articles/2022-10-12/transcript-this-is-what-7-mortgages-will-do-to-the-housing-market
About AMG International Realty
AMG International Realty is a full-service luxury brokerage firm in South and Central Florida. We are a one-stop-shop realty. If you are interested in in buying or selling real estate in Florida, get in touch today: +1 305 318 6968 (Heloisa Arazi).