CCN’s November 21st report seems bleaker. They report that October’s starts “improved sharply,” boosting key housing metrics and seemingly reinforcing the “great health” of our housing market. Yet, CCN goes on to explain that data released by real estate brokerage firm, Redfin, discredits claims supporting our housing market’s health. The data reveals that, though there is a shortage in homes, sellers have been forced to reduce prices, “a clear indication that sellers are finding it difficult to attract buyers.”
CCN concludes that low mortgage rates bolstered the U.S. housing market at the beginning of the year. However, mortgage rates have begun to climb in spite of our mildly atrophying economy—pointing us towards a recession.
In an October article discussing Zillow’s hypothesis, Investopedia concurs with CCN and Zillow’s predictions, citing Pulsenomics founder Terry Loebs. Loebs states, “Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices…These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”
The verdict? Investopedia recommends “preparing a strategy managing risk and finding opportunity in any market condition.”
While our markets have seen all-time highs recently, it’s best to prepare for not-so-fair-weather scenarios.