It’s hard to believe, but we are solidly in the 2nd half of the year. School in Northern Michigan will be starting again in 50-some days, and we are barely more than six months away from Christmas.
We know what the calendar has in store for us in this second half of 2021, but what about the housing market? Will the trends we’ve been seeing across Northern Michigan in the first half of the year continue through December and beyond, or are we due for a market shift?
Let’s break down some predictions.
Mortgage Rates Will Likely Increase, But Remain Low
Many mortgage experts are predicting an increase in the baseline interest rates that dictate mortgage rates. The latest Quarterly Forecast from Freddie Mac told us:
“We forecast that mortgage rates will continue to rise through this year and likely through the end of next year. We estimate that the fixed-rate mortgage will average about 3.4% in the 4th quarter of 2021, rising to 3.8% by the fourth quarter of 2022.”
Though that seems like chilling news for the housing market, keep in mind the historical averages of Northern Michigan and beyond. It wasn’t that long ago that a rate that started with a four was considered competitive, so while we may have higher costs relative to the last 18 months, the rates are still setting up buyers with a significant amount of purchasing power.
Home Prices Will Continue Rising, But The Pace Will Slow
Since prices are first a factor of supply and demand – and there’s no indication that demand is going to slow beyond the levels of supply – it’s likely that we’ll continue to see home prices rise through the end of this year.
However, rising interest rates, a return to some levels of normalcy when it comes to new-built home inventory, and more existing homeowners deciding they’re ready to sell are likely to slow the pace of the price climb as the year goes on.
Home Inventory Levels Will Remain A Challenge, But There’s a Reason to be Optimistic
Despite buyers still pulling their hair out over the extreme competition in the market, the overall inventory picture appears to be (slowly) beginning to shift. Realtor.com recently reported:
“We have seen more new listings this year compared to 2020 in 11 of the last 13 weeks. The influx of new sellers in the last couple of months has been especially helpful in slowing extreme price gains.”
We’re also seeing a jump in new-home starts of 28% over last year, and while these new home starts may not affect the market fundamentals now, they can go a long way towards affecting the attitudes of buyers and sellers, which may create enough consumer confidence that the markets themselves will move.
Bottom Line For Northern Michigan
The real estate market in Northern Michigan is going to continue to shift, and the best way to stay competitive, whether you’re a buyer or a seller, is to work with a market expert like those on the Brick & Corbett team. Our slate of seasoned and experienced professionals know the right moves to put your best interests at the front of the line, and we’re excited to work together with you to help you achieve your homeownership goals.
Whether you’re buying, selling, or anything in between, we’d love to show you what our team can do for you. Reach out to us today, let’s talk. Your family’s home is our family’s business.