Zombies, Global Cooling, and a New Bond Movie
Predictions for the year ahead.
The mortgage/housing business has been a tough slog for some 18+ months now. With low activity and no urgency and prices up some 40%, here’s why 2024 will be a better year to buy a house:
Zombies. Did you know there have been 516 publicly traded companies that have filed bankruptcy between January and September of 2023? Who knew!
I have not seen one report on it on any tv business show or any business publication. Most of these “Zombie” companies that filed should have been out of business in 2020 or 2021 but were allowed to survive longer with low cost credit during the Covid era.
Company closures and job loss mean more relocations. Since you cannot take your house with you when you move, inventory should start to increase and prices will go lower with a larger selection of homes for sale.
Global Cooling. Seems there is always talk about global warming but next year will be the year of global cooling. Most economies in the world are near or in recession already. The “cooling” has already begun and will likely push the U.S. toward some sort of recession or at least a very low growth period. It will be hard for some to stay put if that is how it plays out.
Another cooling market to watch for is new construction. Soon, the weight of overbuilding will bring discounts we haven’t seen in recent memory.
New Bond Movie. I am a huge 007 fan. However, there’s a new bond movie already released and it will be more widely viewed next year. More folks will be talking about bond gains vs. stock gains as interest rates moderate and go lower. If bond prices go up, then mortgage rates will go down. That makes payments decrease and will help bring some relief to the high mortgage payments of 2022 and 2023.
So what’s my prediction for 2024? All these events will bring more inventory and softer pricing ahead. With the average first time home buyer age now at 36 years old, 2024 is shaping up to be a great year for many to enter the home buying market.
Equity Mortgage will always be here to help you through whatever the market is.