According to CNBC, the second half of the year is mainly about affordability for buyers and renters. Housing prices still continue to rise, but at a slower pace than they were this time last year. Mortgage rates; however, on a straight path going up. The short supply of homes for sale will continue, which is keeping prices elevated. Fortunately though, at some point higher mortgage rates will hit affordability and could outdo that short supply.
Homebuilders are struggling themselves by tight credit and a shortage of labor. They have not increased production much this year and it does not look like they are going to in the next six months. Builders are also only building for contract buyers. There will be an increase in new construction, but not enough to fix the supply issue.
It’s not getting any easier for renters in the near future and the demand continues to grow. The demand for occupancy is at a new high, which gives landlords the upper hand with pricing. As new homes form, majority of these occupants are renters. Renters do not tend to be turning into buyers, which will not change in the second half since high rents make it harder to save for a down payment.
The biggest change in the second half will most likely be a larger emphasis on mortgage credit availability. Lenders are seeing new regulations that will force them to be more careful but rising rates will make them want more business. Independent lenders will tend to be more flexible and creative with credit as they strive to get more business.