Honestly there are some great comments here and I appreciate reading the responses and the shared insight. @Jordan Moorhead @Ryan Kelly
@Joe Scaparra One of the metrics I have mentioned in prior posts is the actual PITI cost to the buyer may forecast a market bottom. The simplified theory looks at the holding cost for a median priced home between two time periods and when those costs mirror one another the bottom has been reached. To use numbers for the Austin MSA:
April 2022 the median home price was $550,000 ( market peak)
April 2022 interest rate: 5.975%
Monthly payment $3,739 (loan $2,631 | taxes and fees $1,108)
It is quite likely many April closings locked in at March rates, so let’s include those:
March 2022 interest rate: 5.328%
Monthly payment of $3,559 (loan $2,451 | taxes and fees $1,108)
October 2022 the median home price is $474,900
October interest rate: 7.2%
Monthly payment $3,550 (loan $2451 | taxes and fees $971)
And sure enough, a median price home costs a buyer each month nearly the same now as it did in April ($3,559 versus $3,550, a delta of only $9). The benefit now is that there is likely much more favorable terms for a buyer in October than with a contract written in March.
It is worth noting, this only holds value to the time periods analyzed. If you do not believe April was healthy snapshot for housing market activity then simply adjust the time frame comparisons.
All of this is subject to what lies ahead. If interest rates increase it will likely put further downward pressure on prices. However, as you mentioned Joe, many owners / potential sellers are holding on because they have far more advantageous terms with their current holding costs (interest rate, taxes, etc) and that creates more scarcity and can buck against decline.