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As mortgage rates started increasing in March of 2022 and housing demand slowed down to a 30-year low, I have been very loud my position on the housing market...
And, that is that every time the market decelerates, it builds homebuying demand...
We saw this after the dotcom crash in the early 2000's...
We saw this after the Great Recession...
And, more recently, we saw this after the pandemic...
But, what is happening now with pent-up is historic and has never happened before...
Why?
Well, the easiest way to explain it is the following:
Normally, when demand builds up, it's from the buy side, but the pent-up demand we have currently is not just coming from buyers, but an unprecedented amount of sellers as well.
We have never seen this combination at this magnitude.
The amount of homeowners who want to trade up or down but can't due to the rate on their current mortgage is much more than we know.
With that being said, on the buyers side, if you look at birthrates starting in 1990, you will see a huge spike that maintains for 15+ years.
That spike gives the US more 30-something-year-olds than we have had in decades.
Which brings me to my thesis statement:
We have a historic amount of pent-up demand from not only homebuyers, but also home sellers that will exist for at least another decade pushing the new normal of existing home sales higher than we have seen once the market recovers from the current 30-year lows.
And, we saw a snippet of proof of this during the week of Trump's Liberation Day.
The week of April 2nd, when Trump announced the tariffs, the stock market went into bear territory and everyone was in a panic.
In the middle of that real fear of uncertainty, mortgage rates dropped 15bsp for about a day.
So, not long at all.
And, do you know what happened?
Mortgage applications increased 20% that week.
So, you mean to tell me that in the middle of pure panic, buyers still rushed to lock in mortgage rates with just the slightest little decrease?
If that doesn't tell you how much demand is just sitting there ready to roll, nothing will.
Just wait until we see a mortgage rate decrease that lasts longer than one day in a time with no panic.
When will that happen?
No telling.
But, the longer the market is down, the more demand is brewing.
For Us Agents
So, for us agents, it doesn't matter.
Our job remains the same.
Use the slower market to expand our brand, continuing to help those buyers and sellers who want to do deals today while waiting for the explosion.
This is the vision I had in 2008 when I got back in the business, and my business exploded to 100 deals a year.
The opportunity today is far greater than I had back then and the window of opportunity will eventually be gone.
Don't let it slip through your fingers.
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