High mortgage rates and recession fears are pushing would-be buyers out of the for-sale market, and that waning demand could cause home price growth to moderate throughout the rest of the year, MarketWatch reports. According to Case-Shiller, home prices fell month-over-month from June to July for the first time in 20 years, and a more budget-conscious buyer pool could see housing costs fall even further as stalled house hunters wait patiently on the sidelines.
The 30-year fixed rate averaged 6.94% last week compared with 3.85% one year ago, and the MBA is expecting rates to fall to 5.4% by the end of next year, leading to a steady flattening of home price growth rather than a sharp dropoff.
“Our forecast is for home-price growth moderation to continue,” Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association, said Sunday during the organization’s annual conference in Nashville, Tenn.
But he also warned that some markets may actually see home prices drop. We’re already seeing home values fall in some markets, from pandemic boomtowns like Austin and Phoenix to well-known expensive ones in the San Francisco Bay Area.
Still, even with price drops, don’t expect a surge of inventory as people sit on their ultra-low mortgage rates that they will likely not enjoy again in the near future.
Advertisement
Related Stories
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development
Sustainability
Which Green Building Practices Are Home Builders Using Most?
A recent report reveals which green-building practices are most popular among single-family home builders and remodelers