A silver lining to the slowdown.
For the past two years, furious buyer competition has deterred homeowners who were ready to move from entering the market. Who wants to leave their comfortable roost only to join a game of musical chairs in which there are dozens of desperate players fighting for each seat?
But rising mortgage rates, along with inflation, have altered the contest in a way that favors those who are trading one house for another. Seller-buyers borrow much less than first-timers, meaning they’re less affected by interest spikes. And most sellers will immediately plow all of their rapidly depreciating cash directly into an asset — their new home — that’s still expected to appreciate robustly over the next 12 months.
That, plus incremental improvements in the rate of bidding wars, days on market, and other symptoms of the frenetic buyer activity may be enough to allow would-be-seller-buyers to come unstuck, assured that they’ll find a new and perhaps better chair when the music stops.