ReCasa Financial Blog

Many Americans are facing the challenges that come with an increased rate of inflation. The inflation rate was 3.7% as of September 2023. This has a direct impact on the housing market, as buying power drops, and homebuyers have to reassess what they can comfortably afford.  Higher mortgage rates and higher home prices have caused affordability to drop to a 38-year low and mortgage rates are currently at a 23-year high.  As of October 2023, a 30-year mortgage rate was higher than 7%.

At the start of September 2023, new listings rose 2% which has encouraged some real estate professionals that the drop in inventory could be improving.  Low inventory has created a challenge for real estate investors, which face significant competition while on the search for a property. Not to mention, the cost of materials for a rehab project have increased which further cuts into a project’s profit margin.

Read about foreclosure rates here … Foreclosure Rates Soar In Q3 2023, Nearing Pre-Pandemic Peaks – NMP (nationalmortgageprofessional.com)

Zillow data predicts that housing prices could increase 5% in 2024.  

According to Bankrate.com, “As of July 2023, the median sale price for an existing home in the U.S. was a steep $406,700, the highest July price the National Association of Realtors (NAR) has ever recorded and just $7,000 short of the all-time record.” Senior economist at Zillow, Orphe Divounguy, stated that the Federal Reserve’s campaign against inflation might end soon due to rising productivity, narrowing financial conditions, and minimal wage growth. Many real estate professionals believe that mortgage rates will lower slightly in 2024, but be similar to 2023. Next year may be a challenging market for buyers and sellers due to high mortgage rates, high home prices, and low inventory. Hopefully rates will lower as predicted and the housing market will change. 

Read more about market recovery … Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? – Forbes Advisor

How has the current market effected your real estate investment business compared to previous years?