Here’s Why the Housing Market Isn’t Going To Crash [INFOGRAPHIC]

What Buyer Activity Tells Us About the Housing Market

Though the housing market is no longer experiencing the frenzy of a year ago, buyers are showing their interest in purchasing a home. According to U.S. News:“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”That activity can be seen in the latest ShowingTime Showing Index, which is a measure of buyers actively touring available homes (see graph below):The 62% jump in showings from December to January is one of the largest on record. There were also more showings in January than in any other month since last May. As you can see in the graph, it’s normal for showings to increase early in the year, but the jump this January was larger than usual, and a lot of that has to do with mortgage rates. Michael Lane, VP of Sales and Industry at ShowingTime+, explains:“It’s typical to see a seasonal increase in home showings in January as buyers get ready for the spring market, but a larger increase than any January before after last year’s rapid cooldown is significant. Mortgage rate activity this spring will play a big role in sales activity, but January’s home showings are a positive sign that buyers are getting back out there . . .”It's important to note that mortgage rates hovered in the low 6% range in January, which played a role in the high number of showings. What does this mean? When mortgage rates eased, buyer interest climbed. The jump in home showings early this year makes one thing clear – while rates may be volatile right now, there are interested buyers out there, and when mortgage rates are favorable, they’re ready to make their move. 

Balancing Your Wants and Needs as a Homebuyer This Spring

Though there are more homes for sale now than there were at this time last year, there’s still an undersupply with fewer houses available than in more normal, pre-pandemic years. The Monthly Housing Market Trends Report from realtor.com puts it this way: “While the number of homes for sale is increasing, it is still 43.2% lower than it was before the pandemic in 2017 to 2019. This means that there are still fewer homes available to buy on a typical day than there were a few years ago.”The current housing shortage has an impact on how you search for a home this spring. With limited options on the market, buyers who consider what’s a necessity versus what’s a nice-to-have will be more successful in their home search.The first step? Get pre-approved for a mortgage. Pre-approval helps you better understand what you can borrow for your home loan, and that plays an important role in how you’ll put your list together. After all, you don’t want to fall in love with a home that’s out of reach. Once you have a good grasp on your budget, the best way to prioritize all the features you want and need in a home is to put together a list.Here’s a great way to think about them before you begin:Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle.Nice-To-Haves – These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender.Dream State – This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner.Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate agent. They’ll be able to help you refine the list further, coach you through the best ways to stick to it and find a home in your area that meets your needs.