Certainly no one wants to see price adjustments dipping into negative territory—as they already are for condos in many markets that were seeing boom times a year ago—but we need cooling prices today to give buyers a chance to get back into the market.
The Federal Reserve faces a daunting task over the next several months as it tries to keep inflation at bay without pulling the rug out from under our economy’s pillar of strength over the last several years, home ownership.
Faced with the prospect of home sales cooling through the end of this year, it’s tempting to pine for the boom of the last five years, when we saw home sales volume and price appreciation jump 33 percent and 42 percent, respectively, over the period on a nationwide basis. Resist the temptation.
While economists appear to have breathed a sigh of relief at the Federal Reserve's possible pause in raising short term interest rates, inflation could reignite with an uptick in jobs. But don’t panic — a strong job market is a good thing for housing.