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What One Housing Expert Has To Say About the Current State of the Market

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Market Data + Trends

What One Housing Expert Has To Say About the Current State of the Market

Mortgage rates are rising and home sales are slowing down, but according to the National Association of Realtors' senior economist and director of forecasting, a full-blown correction is within reach


July 6, 2022
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Image: Stock.adobe.com

Mortgage rates for 30-year fixed loans rose to roughly 6% in June, up from a little over 3% one year ago, but according to Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors (NAR), a fast-paced market is slowing down, and so too will home price growth in the near future. Elevated mortgage rates are pricing out a larger share of buyers and causing a substantial reduction of home sales activity nationwide.

As a result, buyers planning to sell or refinance in the next five years could benefit from adjustable-rate mortgages (ARMs), but first-time and lower-income buyers are still likely to face fierce competition from institutional investors scooping up a large number of affordable homes.

“Due to a housing shortage, home prices won’t drop in 2022. Remember that when there is a housing shortage, home prices don’t fall, in fact, home prices rose about 15% in May, although mortgage rates were about two percentage points higher than a year earlier,” says Evangelou.

There are about 20,000 more homes available for sale for buyers earning $200,000. “While it’s promising to see more homes available in the market, more entry-level homes are needed,” says Evangelou.

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