We are very close to the point where most house sales will come to a halt. Yes there will always be some activity because sometimes folks have to move–for jobs etc. But from my close up view in Minnesota, what was already a fairly slow market is slowing further and properties for sales are remaining on the market longer. Prices are high–and coupled with mortgage interest rates that have moved up 20 basis points just this week means the moment of truth is just about upon us.
Today I am working on 2 properties that are sales—both family related (sold by parents to children or grandchildren), so they are special circumstances. Also I have a plate full of orders that are all home equity loans–yes there are a few lenders that require an appraisal for a home equity loan versus just going off the tax assessed value or some similar value. I have no idea what interest rate they are paying–but it would seem those will grind to a halt soon as well.
So my point is that the marketplace may well take care of slowing the economy without a need for incremental Fed Funds rate hikes. If builders in our area aren’t slowing construction they are pretty foolish–it looks like a good year to ‘take the winter off’—we’ll see.