The Housing Market Hasn’t Lost Its Demand: It’s Lost Its Mobility

There is a lot of conversation right now about the housing market being “slow.” But from where I sit, that doesn't quite tell the whole story.

In the last two weeks, I’ve sold six homes.

Why?

Because people are still moving.

People are still buying. People are still selling. People are still interested in making a move, changing their lifestyle, downsizing, upsizing, relocating and finding a home that better fits where they are today.

The demand hasn't disappeared.

The problem is that moving has become increasingly difficult to justify financially.

And I think that distinction is incredibly important when we talk about today's housing market.

This Isn't a Demand Problem. It's a Mobility Problem.

In August, existing-home sales fell to a seasonally adjusted annual rate of just 3.98 million homes.

That is an unusually low level of transaction activity, and it is easy to look at that number and assume buyers have disappeared or that the housing market is heading toward something much worse.

But today's market is fundamentally different from the housing crisis of 2008. We aren't seeing a market defined by widespread foreclosures, rapidly declining home values and severe unemployment.

Instead, we're seeing homeowners who want to move, but increasingly can't make the numbers work. Mortgage rates are one piece of the puzzle.

A homeowner who purchased or refinanced several years ago at a historically low rate may have a very affordable monthly payment today. Selling that home and purchasing another property at today's rates can mean taking on a significantly higher payment, even if the new home isn't dramatically more expensive.

Then layer on higher insurance costs, property taxes, construction costs, everyday expenses and the overall cost of living.

Suddenly, moving becomes a much bigger financial decision. Not necessarily because people don't want to move. Because the cost of moving has become harder to justify.

And That's What I Think We're Missing

When transaction volume falls, it's tempting to assume demand is falling with it. It is evident that is not happening. People are waiting.

Waiting for the right home. Waiting for more financial flexibility. Waiting for a better interest rate, even if it starts with a 6. Buyers are realizing that 2 and 3 percent interest rates are never coming back.

That creates what I would describe as a housing freeze.

There is demand underneath the surface, but fewer people are able, or willing, to act on it.

And my own business is a good reminder of that. Six homes sold in two weeks doesn't tell me that the market is booming.

But it does tell me something important:

People are still making moves. The right house still attracts buyers. The right seller strategy still matters.

And when someone's life requires a move, they aren't necessarily waiting for the perfect interest rate or the perfect market.

They're figuring out how to make the move work.

The Market Is Becoming More Personal

I think this is why broad national housing headlines can sometimes be misleading for homeowners.

“Home sales are down.”

“Mortgage rates are high.”

“Inventory is low.”

All of those things can be true. But none of them can tell you whether you should move.

A homeowner who needs more space has a different set of considerations than someone who wants to downsize.

Someone relocating for work has different priorities than someone who simply wants a change.

A homeowner who has owned their property for 20 years may have substantial equity and very different options than someone who purchased two years ago.

And a home in a highly desirable St. Louis community can behave very differently from a national housing statistic.

That's why I believe local expertise matters more in a market like this, not less.

The national numbers provide context. But your decision comes down to your home, your equity, your finances, your goals and what is actually happening in your specific market.

So What Happens Next?

I don't think the answer is simply “wait for rates to come down.”

There are too many variables affecting housing right now for any one factor to tell the entire story. What I do believe is that there is a significant amount of pent up mobility in the housing market.

People haven't stopped wanting to move. They've become more selective about when moving makes sense.

And when affordability improves, even modestly, we will see some of those people who have been sitting on the sidelines begin to act.

For homeowners, that means understanding your options now can be more valuable than trying to predict exactly what the market will do six months from now.

Because the best real estate decision isn't necessarily made when the market is perfect.

It's made when the move makes sense for you.