The Shifting Housing Market. Implications to home buyers.

Current inflation and, high interest rates are right now major headwinds in the gut of the housing industry.
In his statement, Dietz (2022) states that, The housing market faces both demand-side and supply-side challenges, a phenomenon that is quite unusual during cyclical demand - supply rotations. As interest rates continue to push upwards, so is inflation - which increases the overall cost of constructing a house.
Consequently, home builders confidence has been declining month over month, while the rising costs of raw materials have continued to price median income buyers out of the housing market. Historically this pendulum would periodically swing one way to dictate a buyers or sellers market, however the realities of todays economic sword are double edged. For what has been a sellers market, it is interesting to see how the Feds policy effect on this critical sector of the economy would be in the upcoming economic quarters.

It might just be that the sellers side has eventually cooled off, but with the war in Ukraine holding economies hostage, the pain points remain real, and transition into potentially a buyers market might be further from the near term.

The state of the economy however should not dissuade any willing, and able buyers from making that investment decision. Property values rise, and equity gains are always tied to that time value. Interest rates may currently be high, but those policy decisions are not always in vain.

Joshua Kisuuli.

Just Thinking Out Loud.

Reference:

Ben Verde (2022, June 6) Clear sign of a slowing housing market as builder confidence falls
https://www.inman.com/2022/06/15/clear-sign-of-a-slowing-housing-market-as-builder-confidence-falls/?utm_source=inbriefselect&utm_medium=email&utm_campaign=inbrief&utm_content=921380_dek_0_20220615&message_id=28066824.85582