Inventory Challenges Mount as the Latest Trend is Simply Not to Sell
The trend of folks simply not deciding not to sell is one that's adding to the trials and tribulations of the current housing market, and there's lots of reasons for that, but as we've come to find that's it's just another consequence of high interest rates. Because mortgage rates have been very low for well over a decade now, when they rise to these levels in such an incredibly short period of time that will have a tendency to change plans, and not always for the better.
So many people who own homes and may have considered selling are sitting on the sidelines because they won their homes with interest rates that are considerably lower than current levels. What that means is simple; if the home that they own does not provide enough equity to create the opportunity for a cash purchase of the potential replacement home, they are simply choosing to do nothing. Even if the equity realized at the time of sale would translate in to a significant down payment on a replacement home, just the thought of paying literally twice the amount of interest that would have been paid even earlier this year is enough to reconsider. The author of the accompanying article seems to take it a step further proclaiming not to care about the value at all because selling is something that will never occur! Granted, there are many people who consider their home the last one they'll ever own, but not sure how many can make a similar claim. Regardless, that practice will simply add to the inventory challenges the market still faces as levels, while still rising, are still below the pre-pandemic years from 2017-2019.
Many folks
will fall back on saying that while significantly higher, interest rates now
are similar to what they were in the '90's and early 2000's. Somehow that
is failing to take the sting of more than a 100% increase in rates in less than
a 12-month period. The irony of housing never ceases to amaze us, which
is another reason we created PropertyGuerilla.com like we did, putting the
power of the transaction back into the hands of those involved, which is exactly where it belongs.