When Will The Housing Market Bottom? Ryan Frazier Weighs In

The U.S. housing market is now slowing down after a record-breaking run that saw home values soar to new highs and mortgage rates drop to historic lows.

Although demand and price growth are slowing, analysts and housing economists predict that any correction would be minor.

Ryan Frazier, CEO of Arrived Homes, sums up the consensus among housing experts: “I think it entirely depends on how long interest rates will remain elevated.”

Read also: Warren Buffett's Favorite Housing Metric Just Flashed A Major Signal: What To Watch In The Housing Market

It took longer than expected for the real estate market to begin to slide. According to the National Association of Realtors (NAR), the median home price surpassed $400,000 for the first time ever in the spring of 2022. According to NAR data, prices have increased by almost 40% since the pandemic began, with price increases of up to 70% in some markets.

Potential buyers are avoiding the market as bidding wars disappear, inventory slackens, and interest rates are raised by the Federal Reserve’s fight against inflation.

“The Fed has tremendous control over housing demand through the interest rates, so we will be looking forward to seeing what the fed decides over the next few months,” Frazier said.

Read also: The Fed Is Crushing The Housing Market, Not Inflation

According to Realtor.com, due to overpriced homes and rising interest rates, the average home buyer in October spent 77% more for their loan than they would have the previous year.

That amounts to an extra $1,117 per month with a $425,000 asking price and a 10% down payment.

Frazier said his company believes that trying to time the market is really tough to do and hence the best way to maximize investments is to have a long-term mindset where you buy and hold. Check out how you can invest in a rental property for as little as $100 to earn passive income and build wealth over the long term.

Unlike 2008: While housing economists agree that home prices could fall, it probably won’t be as severe as the housing correction of the Great Recession.

Frazier said that the housing industry has institutional capital backing the market, which wasn’t present in 2008.

He mentioned homeowners should be able to service their debts without issue given tighter credit requirements, unlike in 2008 when there was a significant increase in supply from homeowners unable to service their debt.

To read about the latest developments in the industry, check out Benzinga's real estate home page.

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