Are you enjoying this weather?  Holy cow it's amazing.  This is my dream summer in Sacramento, lol.  I know it'll get warm here soon, but damn I am enjoying this moderation of temperature while it's here.  I hope you are too.  I also hope all my fellow Father's out there had a wonderful day and weekend! 

Well, I listened to one of my usual podcasts last week and had my thinking about the market completely challenged.  My line of thinking has been interest rates will trickle down which would allow the low mortgage rate seller to feel more comfortable listing their house and then buying to move/upgrade.  The challenge I am now pondering is that instead of lower rates bringing more listings, lower rates could actually do the opposite.  The thinking is lower rates could actually continue to see restrictive inventory as the hold price of the current home remains cheap (2.75-3.5%), and a possibly lower rate in the coming months (<6%) brings affordability of a monthly mortgage payment back within reason.  Thus, a homeowner can hold their current home, rent it out (covering their cost) and afford to purchase a new home (without selling, cash able).  In this event, there is a potential in the real estate market by the end of 2023 where we could see negative inventory YoY, higher home prices (supply constraint) and lower interest rates.   That would be truly something.  It increasingly looks like the only way we will be able to see a gradual increase in supply is with these higher mortgage rates for longer.

What's your theory on housing? I'm interested in other takes.

What are you seeing or hearing? I'd love to know paul@guiderealestate.com