We had a closing today where the buyer was locked in to a 5.75% interest rate VA loan. That’s the lowest I have seen in awhile. That lender called me and said we could do it again…
Interest rates are about 2X what they are last year, somewhere in the high 6s. While these are not abnormally high rates the fact is that most homeowners are currently locked into rates in the 3 percent range. This is a disincentive to sell and it instigated a tug-of-war between millennials and boomers.
There was a thought that Millennials just wanted to drink lattes and and their craft beers but were not interested in settling down into a home. We find out that is not true, They do want to buy and house and are certainly in the market. Now, primarily because of the high interest rates there is a real shortage of inventory. Boomers, who would would normally be looking to downsize are preferring to “age in place” with their 3% mortgages.
So now we are short on homes. We would be short even if boomers would sell. Housing researches say we are short 4.3 million homes nationwide. If I divide 330 million population by 4.3 million that comes to one home for every 77 people. That means we are supposed to need about 1,300 homes here in the Mat-Su. Am I right? Haha.
We do need more homes. And those homes need to be less than $500K each. Closer to $350K would be better.
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