July 13, 2023
Here’s what experts have to say about what lies ahead for inventory, mortgage rates, and home prices. Let’s connect so you know what to expect in the housing market for the rest of the year.
The connection between housing inventory, mortgage rates, and home prices is complex and can be influenced by various factors. Here’s a general overview of how these elements are interconnected:
- Housing Inventory: Housing inventory refers to the number of homes available for sale in a particular market or area. When there is a high housing inventory, it typically indicates a buyer’s market, meaning there are more homes for sale than there are potential buyers. Conversely, a low housing inventory indicates a seller’s market, where there are more buyers than available homes.
- Mortgage Rates: Mortgage rates represent the interest rates charged by lenders on home loans. These rates fluctuate based on various economic factors, including the overall state of the economy, inflation, and monetary policy set by central banks. Higher mortgage rates mean increased borrowing costs for homebuyers, while lower rates make borrowing more affordable.
- Home Prices: Home prices are determined by supply and demand dynamics in the housing market. When there is a high demand for homes and a low housing inventory, prices tend to rise. Conversely, when there is a low demand or a surplus of available homes, prices may decline or grow at a slower pace.
Now, let’s explore the relationships between these factors:
- Low Housing Inventory & Mortgage Rates: When housing inventory is low, and demand outstrips supply, it can create competition among buyers. This increased competition may drive home prices up. Simultaneously, if mortgage rates are low, it can stimulate demand further as borrowers can access more affordable financing. Consequently, the combination of low inventory and low mortgage rates can contribute to rising home prices.
- High Housing Inventory & Mortgage Rates: When housing inventory is high, and there is a surplus of homes relative to buyers, it can lead to decreased demand and potentially put downward pressure on home prices. In such scenarios, mortgage rates become an essential factor for buyers. If rates are high, borrowing costs increase, which can further dampen demand and limit upward price movement.
It’s important to note that these relationships are not absolute, and other factors, such as local market conditions, economic trends, and government policies, can also influence the housing market. Additionally, the interplay between housing inventory, mortgage rates, and home prices can vary based on the specificities of different regions and time periods.
Steve Schappert Founded, and is the broker at Connecticut Real Estate, Schappert owns The Connecticut Art Gallery and Home & Art Magazine Steve also designed, built, and shipped a zero-energy double-walled home to Germany. Schappert is an abstract painting artist and has painted, renovated and provided energy audits for over 1300 homes.
When it comes to real estate, construction and energy efficiency, Steve Schappert is one of the most sought-after experts in the field. With more than 40 years of experience in these areas, he has become a trusted source for reporters looking for insights on the industry. From helping develop net-zero homes to advising on sustainable building practices, Schappert’s knowledge and expertise is unrivaled. Whether it’s for a news article or an in-depth magazine story, reporters turn to Steve Schappert as a reliable source of information. With his expertise and guidance, they can ensure that their stories are accurate and up-to-date.
In the last year I have been interviewed by ABC News Manhattan, Connecticut Magazine and featured in 2 articles in The Washington Post.
If you are looking for a creative broker that thinks outside the box and has been a recognized expert for over 30 years call or text 203-994-3950