What a year it was! I'd be remiss to talk about what's to come without first reviewing the past year. In the first quarter of 2022 we saw a continued demand as buyers took advantage of the historically low mortgage rates (remember when you could still book a 30-year fixed in the low 3 percent range?)
As we moved into the Spring and Summer we began to feel the effects of the increasing Federal Funds Rate in the housing market as mortgage rates climbed at a record high pace topping out over 7 percent for a conventional 30-year fixed. The Fed's attempt to curb inflation sent the housing market into recession as, with higher rates for their next home, fewer people chose to list their homes (resulting in fewer sales) and we remained at or near all time lows in inventory across the country throughout the year.
In the last quarter of 2022 we began to see interest rates start to tick down as inflation data came in better than expected, with the conforming 30-year fixed sitting around 6 percent. Buyers began to re-enter the market as affordability improved, sending inventory even lower.
Even in this unpredictable market we saw price growth in the Greater Boston area, though no longer stretching up to the double digit percents year-over-year as was seen in '20 and '21. This decrease in price growth is certainly a good thing, as buyers were being priced out of the market.
There are many theories on what will happen this year in housing. The hope is for a much more boring and stable market, without large swings in mortgage interest rates.
A lot is riding on the economy at large. If economic data stays strong and jobless claims don't increase we're likely to continue to see interest rates above 5 percent, but without giant swings to the 7% highs in 2022 (Housing Wire). In this case, I'd expect demand and inventory to increase slowly as more stable economic climates encourage sellers to list their homes.
However, if we do see some weakening in economic data, that could lead to mortgage rates below 5 percent, especially if we see the 10-year treasury yield dip below 3 percent. If this is the case, I'd expect to see an uptick in demand, more competition among buyers, and continued positive price appreciation. With greater demand, I'd expect to see improved inventory levels, allowing for a much more balanced market.
I'm excited to see what this year brings, and for all of our sakes hope that the roller coaster ride ended in 2022!
Through his many resources and relationships in the industry he will make sure your house will sell for the highest possible price, in the least amount of time, with the least amount of hassle.
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