Low Supply and Weak Demand for Housing = ??

We have a low supply of existing homes for sale and a recessionary level of new housing starts compounded with rising interest rates.

Anytime interest rates rise, home buyers have always jumped off the fence and bought a home or a car. We just went through that surge when mortgage interest rates went from 3.5% to 4.5%. The home buying surge was tepid at most. 

I know the Fed is trying to land their quantitative easing like a hot air balloon to keep inflation in check but interest rates have to go up.

This will not cause more buyers to buy but cause them to stay on the fence?

What happens when you have low supply of homes on the market and weak demand?

A balanced market …………… not so much!

It is becoming clear.

We will not have a buyers or sellers market and we will not have a balanced market. I am not an expert and can’t predict what our politicians and the Fed will do but their tricks are limited. If they are running a sting, I can’t predict the outcome!

What I can predict but can’t predict the time frame ------- interest rates are going up, substantially!!

When interest rates go up, housing demand will stop cold! Yes we have pent-up demand but the Millennial generation will not buy, baby boomers will stay in place and families are not moving for new opportunities without assurances of work.

So what does this mean to us?

As housing goes so goes the economy. No one else is telling you but this “malaise” will mirror the Carter years and this is after years of “recovery”. Timing – not sure but hold onto your hats and your money.

If you really think that everything is going to be alright, you are in denial. There are a lot of events unraveling in the world and to the family, faith and freedom – how can the outcome be good?