the concern about ARMs resetting, but a crash is unlikely. Here's why:
Stable Demand: Despite localized declines in areas like coastal Florida due to high insurance costs, overall demand for housing remains steady. Redfin predicts a 5% year-over-year increase in home sales for 2024, totaling around 4.3 million home sales (Kiplinger.com).
Homeowner Equity: Many homeowners have significant equity built up in their homes, providing a cushion against financial stress from ARM resets. Current home equity levels are at record highs, with the average homeowner having over $200,000 in equity (Kiplinger.com).
Inventory and New Construction: The number of new single-family home permits is on the rise, with 968,000 permits applied for in October 2023—the highest since May 2022 (NerdWallet). This increase in supply can help stabilize prices and offer more options for buyers.
Affordability Trends: While affordability remains a challenge, it is expected to improve slightly. Lower mortgage rates and modest home price declines should help first-time buyers enter the market (Realtor, NerdWallet).
Considering these factors, now is a great time to focus on finding listings. The market remains active and competitive, offering excellent opportunities to help clients navigate and capitalize on these favorable conditions.
