A recent article by Forbes suggests that the housing market will settle as long as a few changes start to unfold.
“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”
While inventories grow, the mortgage rates need to fall. A quick shift in mortgage rates could create a rise in demand for buying, eating up all the inventory and thus throwing the housing market deeper into trouble.
“Reductions [should] happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says. While it may take some time for buyers to see these lower rates, we are still looking towards an optimistic year with many experts believing Q4 will end with rates around 6%.