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Despite relatively low interest rates and increased listings in many markets, prospective homebuyers are delaying their purchases. The conditions suggest the housing market is structurently “primed” for activity — there’s supply, and demand capacity — but many are holding off due to uncertainty over sustained rate increases, rising home prices, and concerns over future affordability.
Some buyers are skeptical that current interest rates are the “bottom,” and are waiting in hopes of a dip. Others are simply priced out: even where rates are favorable, purchase costs (down payments, closing fees, insurance, property taxes) remain daunting. The result is a kind of “latent demand” — a pool of potential buyers who aren’t entering the market now, though they might in more favorable conditions.
This dynamic is dampening the pace of sales. Real-estate agents and analysts are watching for what might tip those waiting buyers — perhaps a rate cut, a moderation in home price inflation, or macroeconomic stability. Until then, the market may remain in this awkward in-between state: supply exists, but many who could buy are choosing to wait.
Read the full article on: Financial Post.
