‘Constant domestic price slowdown.’ Here’s What 5 Economists And Real Estate Professionals Predict What Will Happen To The Housing Market This Year

What will happen in the housing market this year?

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When Will Home Price Growth Really Slow? Will mortgage rates continue to rise? What should I know if I’m trying to buy a home now? These are all questions we’re hearing from readers, peers, and others, so we asked top economists and real estate professionals to explain what’s really happening in the housing market.

Mortgage rates may continue to rise – but it depends on the economy

Already this year, average 30-year fixed rates have risen from a little over 3% in January to nearly 6%, data from Bankrate shows. And it is possible that the development will not stop here. ,See the Lowest Mortgage Rates You Can Get Here,

Danielle Hale, chief economist at Realtor.com, says it depends on a number of factors, including the jobs report. “If the jobs report is too strong, this could lead to a fresh increase in mortgage rates in anticipation of a bigger Fed action.

and until We See continued evidence that inflation has peaked, says Greg McBride, chief financial analyst at Bankrate, the still risk mortgage rates will climb higher. But he adds that the prospect of the Fed pushing its interest rate hikes forward and doing it sooner rather than later could actually help keep a lid on mortgage rates or bring them down. McBride says, “More rate hikes now mean lower rate hikes later, this means that the timetable for the highest interest rates is extended and this means that rates fall too soon due to a weakening economy. “

And here’s an interesting point: “Real mortgage rates, mortgage rates lower inflation rates, are negative for the first time in 40 years, so mortgages are not as expensive as they appear when inflation is controlled. Most quarters over the past 40-50 years With the U.S. facing higher home price increases than consumer price increases, inflation itself acts as a floor for increases in home prices,” said Misha Fischer, chief economist at Angie, an internet services company that provides Combines, she says, with verified professionals for home projects and services.

The increase in the price of the house will be calm…

“Due to housing shortages, home prices will continue to rise in the coming months. Although inventory is improving, it will remain tight as home builders cut back on single-family home production,” says the National Association of Realtors Nadia Ivanhello, Senior Economist and Director of Forecasting at NAR, says. Although low affordability drives many homebuyers to price, home prices will not rise as rapidly as they were in previous months. The decline will continue. Nevertheless, home prices will continue to experience double-digit appreciation year-on-year in August,” says Evangelo.

For his part, Hale says that housing prices, both average and selling prices, slow down as summer approaches. “I expect this year to be specific in that regard. On top of the general seasonal slowdown, housing prices should continue to rise as the housing market resets,” Hale says. ,See the Lowest Mortgage Rates You Can Get Here,

…but overall home prices will still rise

For his part, Bankrate’s McBride says the backlash from potential buyers is driving prices down. “Sale prices will go down as the market cools, but this cooling is a return to that balanced market that has been absent for the past few years,” McBride says.

“In August, I expect home prices to rise mid-single digits year-over-year for four reasons,” says Angie’s Fisher. Among them, common repeat sales indices such as Case-Shiller and FHFA are behind by a few months, so they will not pick up on the latest day-to-day conditions. And even though affordability is at a 30-year low, there is a supply and demand imbalance in the housing stock in many desirable metros. Also, the pressure of falling prices in housing is very common and they prefer to wait until economic conditions force people to sell. Besides, inflation is a wild card, she adds.

demand is cold

Jeff Tucker, Zillow’s senior economist, says demand is holding back at today’s prices, and home buyers are few and far between compared to the pandemic. “It is cooling the market and pushing it towards the rebalancing it needs. Very expensive markets, where home buyers are already on edge when it comes to affordability and are therefore more sensitive to mortgage rate changes, have seen red-hot growth during the past 2 years. Likely to be at speed,” Tucker says.

Meanwhile, there is increasing uncertainty over what’s in the economy, so the willingness of buyers to reduce and maximize their housing budgets when widespread inflation means buying other vital goods like gas, groceries and utilities. Categories are eating up the bulk of their paychecks, Hale says. “By region-wise, we may see the biggest slowdown in home prices in the West and South, where listing and selling prices are highest and where there has been the largest ever change in inventory,” Hale says.

The advice, recommendations or rankings expressed in this article are those of MarketWatch, and have not been reviewed or endorsed by our commercial partners.

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