While a slight drop in borrowing costs since October has fueled a bit of a resurgence in buyer demand, ongoing affordability obstacles paired with a nationwide housing shortage could characterize a slow but competitive spring buying season. Home sales remain well below where they were just one year ago, but they’re slowly rebounding as interest rates begin to fall.
Still, today’s homebuyers are spending roughly 31% of their household income, equaling $1,595 per month, on a mortgage after a 20% down payment, Forbes reports. As a result, more affordable markets such as Cincinnati and St. Louis could see increased competition in the months ahead.
Buyers and sellers waiting for home prices to either plunge or skyrocket will be disappointed. Instead, prices are forecast to move on a slow, boring trajectory like they have historically, and inch a little higher in the spring after seasonal winter lows.
While heat in the housing market has ticked up in the past few months, there’s no guarantee it will continue along this path. The courses of inflation, unemployment and especially mortgage rates will determine what comes next.
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