Today’s Housing Market is ANYTHING but NORMAL
Today's housing market is ANYTHING but NORMAL. Here are the five reasons.
Reason number one is the mortgage rates.
We know that. In the 1970s the mortgage rate was 8.86%. In the 1980s, it was 12.7%. In the 1990s, it was 8.12%.
In 2000, it was 6.29%. And in 2010 in that decade it was 4.09%. And you know, right now the mortgage rate is 2.87%.
That's insane. That is one of the reasons the market is so crazy right now.
Number two is the home price appreciation.
Since 1995, average home price appreciation per year has been 4.14%. And as for the National Association of Realtors,
This year the home price appreciation is 14.1%. Look at the difference and we know in some areas probably is more than
because that's an average number. So the home price appreciation is going at such a high rate that's making this market bananas.
And number three is the month supply of inventory.
Which means how many homes we have in the market, and how many homes we sell per year or per month.
Historically, six months of supply is a healthy market with a moderate increase of price means if in a marketplace, whatever
amount of home we sell in six months, do we have that quantity of the house available in the market as per National Association of Realtors.
Right now we have 2.6 month of inventory and it's crazy. It's less than half. It's in high demand. And that's making this market crazy.
And the number four is the number of days it takes to sell the home. So based on the market is a great metric because that shows how quickly the homes are selling before pandemic.