Our speaker today was Jack Pier, senior mortgage loan officer, M&T Bank. Jack is a seasoned banker with 33 years of experience. He began his discussion with several observations. Housing prices are going up largely because many home owners have very low-rate mortgages written within the past ten years and are reluctant to give them up, so housing turnover is low and this is reducing homes available for sale. Also, inflation has caused the FED to raise short term rates and that has caused mortgage rates making home ownership less available for many, especially young families buying a first home. This has also caused rental prices to rise.
He reviewed a relatively new phenomenon, 'generational living'. This applies more often to larger and more expensive homes. Older parents (or other relatives) want to down size and their adult children cannot afford a new home or to buy the family home. They subdivided the home with the children assuming some or all of the expenses and all live together. Eventually, the children will become the sole occupants.
Jack noted the problem is abating, somewhat. Mortgage rates have already fallen from over 8% earlier this year to around 6.5 - 7%, but the supply remains tight. He believes supply/demand will remain tight for a while.