Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.
The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it’s put the market into a reset position.
As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.
If you’re a homeowner, your net worth got a big boost over the past few years thanks to rapidly rising home prices. Here’s how it happened and what it means for you, even as the market moderates.
Equity is the current value of your home minus what you owe on the loan.
Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially.
And while home price appreciation has moderated this year, and even depreciated slightly in some overheated markets, that...
If you’re thinking about buying or selling a home this year, you may have questions about what’s happening with home prices today as the market cools. In the simplest sense, nationally, experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market.
That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying:
Danielle Hale, Chief Economist at realtor.com, says:
Now that the end of 2022 is within sight, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about buying a home. Here’s a look at the latest expert insights on both mortgage rates and home prices so you can make your best move possible.
Mortgage Rates Will Continue To Respond to Inflation
There’s no doubt mortgage rates have skyrocketed this year as the market responded to high inflation. The increases we’ve seen were fast and dramatic, and the average 30-year fixed mortgage rate even surpassed 7% at the end of last month....
Every time there’s a news segment about the housing market, we hear about the affordability challenges buyers are facing today. Those headlines are focused on how much mortgage rates have climbed this year. And while it’s true rates have risen dramatically, it’s important to remember they aren’t the only factor in the affordability equation.
Here are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each one.
1. Mortgage Rates
This is the factor most people are focused on when they talk about homebuying conditions today. So far,...
With all the headlines and talk in the media about the shift in the housing market, you might be thinking this is a housing bubble. It’s only natural for those thoughts to creep in that make you think it could be a repeat of what took place in 2008. But the good news is, there’s concrete data to show why this is nothing like the last time.
There’s Still a Shortage of Homes on the Market Today, Not a Surplus
For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Supply...
As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation is cooling as well. And if you’re following along with headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?
While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.
Does the latest news about the housing market have you questioning your plans to sell your house? If so, perspective is key. Here are some of the ways a trusted real estate professional can explain the shift that’s happening today and why it’s still a sellers’ market even during the cooldown.
Fewer Homes for Sale than Pre-Pandemic
While the supply of homes available for sale has increased this year compared to last, we’re still nowhere near what’s considered a balanced market. A recent article from Calculated Risk helps put this year’s increased inventory into context (see graph below):
The housing market is rapidly changing from the peak frenzy it saw over the past two years. That means you probably have questions about what your best move is if you’re thinking of buying or selling this fall.
To help you make a confident decision, lean on the professionals for insights. Here are a few things experts are saying about the fall housing market.
Expert Quotes for Fall Homebuyers
A recent article from realtor.com:
“This fall, a more moderate pace of home selling, more listings to choose from, and softening price growth will provide some breathing room for buyers searching for...