Inflation not a friend to current home Buyers and Sellers
I do not know of one person who has not been affected by this current "inflation" nightmare that we are all living in. As-you-know inflation has "rocked" everyone's world in the sense that the Cost-of-Living (COL) such as groceries, gasoline, water, natural gas, electricity etc has been and/or will keep skyrocketing up-and-up with no real end in sight.
Included in this inflation/COL is the ongoing increases to the interest/mortgage rates. Inflation also has lowered the values of people's pensions, savings, treasury notes etc. and their overall retirement expectation has definitely been lowered as well. If one has not retired yet, then these workers will more than likely have to work longer to retire.
To others their home ownership dreams are heading down a crater or some would say heading down the toilet. You maybe asking, why do you say this Oscar? The answer is quite simple.... Anyone wanting to buy a home today has less purchasing power because of the higher interest rates thus a higher monthly mortgage payment they will face. Combine that with the more expensive cost of everyday needed consumer products (ie: food, gasoline etc etc.) and it is no wonder why a lot of buyer's home ownership dreams are becoming more-and-more non-existent, vanished, vamoosed, no mas ... however you want to say it is fine with me.
The increases in mortgage rates has caused a lot of potential buyers to simply "back away" from their dream of buying a home for many reasons. Here I will share with you two-reasons why the back-away (1) The much-much higher mortgage payments than it would be if the rates had not gone up so drastically (2) Although a Buyer may still be approved for a home loan, at this point in time they will now qualify for a smaller purchase amount than they had qualified before the interest rate hikes. The home they will now qualify for will probably be one with a smaller square footage and/or less amount of bedrooms and possibly the buyer will have to give up the idea of buying in the neighborhood they wished to buy in. See what I mean? Buyer dreams before inflation, in regards to home ownership, are being and/or already have been washed away.
Currently the inflation situation with a home owner is that they are seeing a dramatic decrease in the value of their home. Some homeowners have chosen not to sell and at this point will sit on their home until better times with higher buyer demand and higher prices are to come around again.
But, if for whatever reason an owner definitely needs to sell, they are in "real-time" living another type of nightmare as they keep watching the decline of their home value drop again-and again right in front of their eyes. Yes some home sellers are indeed starting to panic because they now know that they will not get anything close to what they could have been offered in the 1st one-and-a-half quarters of this year 2022.
If no one else will say it, then I will say it ...."Inflation sucks" !!!! And it is sad to say that in one way or another inflation has had a negative impact on everybody's "wallet".
Oscar Castillo : BROKER - REALTOR®