Seattle Space Needle & Puget Sound
More signs of a declining real estate market, but there may be signs of hope.
Rising Interest Rates threw cold water on the housing market in 2022; but now vacation and 2nd homebuyers are getting hit with a case of bad timing. Over
Loans for Vacation or 2nd homes dropped by more than 50-percent during the past year:
“That was an additional fee for loans” fees created by the federal housing agency were designed to benefit 1st time homebuyers says Taylor Marr, Deputy Chief Economist at Redfin, but “These higher fees went in place right at the same time (interest) rates started to rise and that caused a (drop) in the number of 2nd home loans.”
And, the timing couldn’t have been worse: Inflation sent the cost of living sky high, the stock market lost its steam and remote work began to fade.
The effects can be seen in vacation rentals he says “Places like Lake Chelan and in the mountain area’s like Leavenworth or Coastal Oregon; certain sites like AirDNA are reporting increased vacancies.”
Then there’s inflation: Marr says if new numbers show prices cooling, the housing market is going to benefit “The main thing we’re waiting on right now is for inflation data to really reveal that prices are easing; and they’re cooling at the pace at which the Fed is targeting.”
And that could happen we’re told as early as this week.
