In an article published August 2, 2022 by CNN's Anna Bahney, the topic of "What is next for the US Housing Market?" was covered with insight from Dr. Lawrence Yun, the chief economist for the National Association of Realtors. CLICK HERE to read the full article or see below for excerpts highlighting the market. Now is a great time to buy and sell.
Mortgage Rates Will Settle by the Year's End
"Yun said that while mortgage rates may tick up or down in the months to come, the biggest jumps have already happened. 'We may be topping out on mortgage rates,' he said. Yun noted that mortgage rates may have largely already "priced-in" the Fed's current and anticipated future interest rate hikes. He expects mortgage rates will settle in near 6% by year's end and that home sales will normalize once mortgage rates become more stable."
Inventory Will Rise
"As the market slows, potential buyers who continue to search for a home will have less competition and more homes to chose from, offering more breathing room than the frenzied market of the past two years.
Soaring demand to buy a home during the past two years led to record low inventory of homes to buy and that pushed prices up. In June, inventory saw its first year-over-year turnaround in three years. The number of homes available for sale at the end of June was up 9.6% from May and 2.4% from a year ago, according to NAR."
Home Prices Will Rise More Slowly
"The median price of a home reached a record high of $416,000 in June. But the pace of price growth has been slowing lately. Median home prices for existing homes were up 13.4% in June from the year before, compared with the 23% spike in home prices in June 2021, according to NAR.
Yun said he expects home prices for this year will be up 11%. That's less than the 16.9% year-over-year increase from 2020 to 2021, but more than he had predicted at the beginning of this year. As higher mortgage rates tamp down buyer demand, inventory will rise and sales will fall, which should help prices to moderate the rest of this year.
'Homes may be sitting on the market longer, there will be more properties with price reductions," Yun said. "Buyers who do deeper homework may be able to find a home with a price reduction or get a better price negotiation.' "
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