The housing market can be difficult to predict, but there are signs that it may have bottomed out. While it’s impossible to know for sure until it’s already happened, there are three compelling reasons why we could be at the bottom of the market.
- Inflation is Moderating: Mortgage interest rates often follow inflation, and the Federal Reserve can influence but not control these rates. As inflation moderates, interest rates may become more favorable for homebuyers.
- Lack of Supply in the Market: Redfin has reported that the number of homes coming onto the market in California is up from a five-year low in December, yet there is less than a two-month supply of California homes for sale. This shortage of supply may help to stabilize housing prices.
- Demand for Homes is Growing: Open houses are seeing good traffic, and there is an increasing number of multiple offer situations. This indicates that there is a strong demand for homes in the market.
These three factors all point towards a market that has bottomed out and is ready to recover. While there may be other variables to consider, the current trends suggest that we could be at the bottom of the housing market.
As the market recovers, prices will likely start to rise, and it will become more challenging to find affordable housing. If you are considering buying a home, now may be the time to act before prices start to climb again. However, it’s always essential to do thorough research and consult with professionals, such as real estate agents and financial advisors, to make informed decisions.