What is the housing market like now?
Although mortgage rates are slowly rising — some pros said we could see more of that (you can see the lowest mortgage rates you can get here) — homebuyers have seen house prices spike over the summer. Doesn’t seem to be as slow as they would like. But pros say there’s good news coming your way: This red-hot real estate market is showing signs of slowing down.
Prediction 1: Slow rise in home prices and potentially higher mortgage rates
Lawrence Yoon, chief economist for the National Association of Realtors (NAR), says house price growth will slow in the coming months as home sales fall and mortgage rates rise. “Starting in December, year-over-year home price growth is likely to be in the mid-single digits, between 4% and 7%,” Yoon says. Furthermore, he says, if inflation gets ugly and the Federal Reserve has to be even more aggressive, mortgage rates could soar past 7% and actually choke home appreciation.
Bankrate chief financial analyst Greg McBride says demand is falling and as sellers realize the moon price they are asking will not materialise, prices are being cut. “Houses are still selling at higher prices than before, but the appreciation is slow,” says McBride.
Jeff Tucker, senior economist at Zillow, says: “Prices are still rising, not as fast as we’ve been used to for the last two years. Prices will be down from today’s record highs later this year or in the next few markets. could fall, but buyers should not expect home prices to fall anywhere near pre-pandemic levels.”
Prediction 2: Expect lower home sales
“We’re moving into the middle of the holiday season in July and August, when buyers and sellers are shifting their priorities away from home moves. This can sometimes result in slower market momentum and I expect the impact of higher mortgage rates to result in a more than usual drop in selling activity this season, but house prices still have plenty of momentum. is and likely will “continue to grow,” says Danielle Hale, chief economist at Realtor.com.
You can find the best mortgage rates here.
Prediction 3: Buyers will have more to choose at home
A big story of late spring and summer is the increase in housing stock. “The housing shortage has been acute for two years, beginning in the summer of 2020, and house prices have risen by a double-digit percentage year-on-year. But the number of homes for sale started to increase in May and that trend will continue into July, meaning buyers will see they have more options and will benefit from more negotiations,” said Holden Lewis, home and business owner Mortgage specialist at NerdWallet.
And he adds that higher home prices coupled with higher mortgage rates are making homes unaffordable for more people. Therefore, “buyers who stay in the market will face less competition and have more homes to choose from,” says Lewis.