‘Continued slowdown in home prices.’ Here’s what 5 economists and real estate professionals are predicting for the real estate market this year – MarketWatch | Omd Cialis

What will happen in the housing market this year?

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When will house price growth really slow down? Will mortgage rates continue to rise? What do I need to know if I’m trying to buy a home now? These are all questions we hear from readers, peers and others, so we asked top economists and real estate professionals to break down what exactly they think will happen in the housing market this year.

Mortgage rates could continue to rise – but that depends on the economy

Already this year, average 30-year fixed rates have risen to about 6% from just over 3% in January, data from Bankrate shows. And it’s possible the growth won’t stop there. (You can find the lowest mortgage rates you can get here.)

Realtor.com chief economist Danielle Hale says it depends on many factors, including job reports. “If the jobs report is too strong, it will likely trigger a fresh hike in mortgage rates in anticipation of larger Fed action.

And until we see sustained evidence that inflation has peaked, there is still a risk that mortgage rates will continue to rise, says Greg McBride, Bankrate’s chief financial analyst. But he adds that the prospect of the Fed frontloading its rate hikes and doing more sooner rather than later could actually help keep mortgage rates under control or even lower them. “More rate hikes now mean fewer rate hikes later, it means the timing for peak interest rates is brought forward, and it means the eventual fall in interest rates due to a weak economy also happens earlier,” says McBride.

And here’s an interesting statement: “Real mortgage rates, mortgage rates minus the rate of inflation, are negative for the first time in 40 years, so mortgages aren’t as expensive as they look if you control for inflation. Inflation itself tends to serve as a floor for house price growth, with most quarters over the past 40-50 years facing higher house price growth than consumer price growth,” says Mischa Fisher, chief economist at Angi, an internet services company that connects users with vetted professionals for home projects and services.

Home appreciation will cool down…

“Due to the housing shortage, real estate prices will continue to rise in the coming months. Although inventories are improving, they will remain tight as builders have reduced single-family home production,” said Nadia Evanhelou, senior economist and director of forecasting at the National Association of Realtors (NAR). However, with many homebuyers overpriced due to low affordability, home prices will not rise as quickly as they have in recent months. “There will be a sustained slowdown in home prices. Still, house prices are likely to continue to rise at double-digit yoy rates in August,” says Evangelou.

For her part, Hale says that home prices, both median and selling prices, tend to slow as we near the end of summer. “I expect this year to be typical in that regard. In addition to the usual seasonal slowdown, house price growth should continue to ease as the housing market resets,” Hale said. (You can find the lowest mortgage rates you can get here.)

… But overall real estate prices will still rise

For his part, Bankrate’s McBride says asking prices are falling from moonshot levels as potential buyers pull away. “Selling prices will level out as the market cools, but this slowdown is just a return to a balanced market that has been absent in recent years,” says McBride.

“In August, I expect house prices to rise in the mid-single digits year over year for four reasons,” says Angi’s Fisher. Below this, popular repeat sales indices such as Case-Schiller and the FHFA are lagged by a few months so they don’t capture the latest daily conditions. And even though affordability is at a 30-year low, there are still supply-demand imbalances in the housing stock in many desirable metropolitan areas. In addition, price pressures in residential real estate are widespread and when economic conditions do not compel people to sell, they prefer to wait. Inflation is also a wild card, she adds.

The demand cools down

Demand is falling at today’s prices, and home shoppers are fewer and further afield than during much of the pandemic, says Jeff Tucker, senior economist at Zillow. “This cools the market and pushes it to make the necessary realignment. Very expensive markets, where homebuyers are already on the affordability edge and are therefore more sensitive to changes in mortgage rates, as well as pandemic superstar markets, which have seen rapid growth over the past two years, will most likely slow,” says Tucker .

Meanwhile, uncertainty about what the economy holds is growing, thus reducing buyers’ willingness to go all out and maximize their housing budget when widespread inflation means other key categories such as gas, groceries and utilities are consuming larger chunks of their homes eat up paychecks. says Hale. “By region, we’re likely to see the biggest slowdown in home price growth in the West and South, where both listing and selling prices are highest and where inventories have seen the biggest turnaround yet,” Hale said.

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