Despite U.S. mortgage rates at 10-year highs, U.S. home prices continue to soar.
Analysts and economists are still concerned about whether home price gains will slow due to rising interest rates.
Mortgage interest rates in the United States have risen sharply this year, causing housing demand to decline. But housing prices remain high, with some companies predicting they will rise by more than 10% by the end of the year.
However, with high mortgage interest rates and declining housing demand, housing prices in the United States remain high. As a result, price predictions for the U.S. real estate market have become a focus for many investors and potential homebuyers.
Despite unfavorable market conditions, the U.S. real estate market remains hot. Rates on 30-year fixed mortgages are near 6.3%, near their highest level in more than a decade. As a result, home mortgage loan applications are down more than 50% from last year, reflecting the rapid decline in housing demand, yet home prices appear to be continuing to rise.
The median price of an existing home in May rose nearly 15% year over year to $407,600, the highest level since records began in 1999, according to the National Association of Realtors. Redfin data shows that about 60% of homes sold in May were sold for more than the listing price. Although home sales fell 3.4% year-on-year from April to May and were down 8.6% from the same period last year, home prices are still rising.
Some economists expect that as interest rate hikes continue to push mortgage rates higher, home prices will eventually respond appropriately to the decline in housing demand. However, given the structural mismatch between U.S. housing supply and demand, the response may not be as drastic as some expect.
Let’s take a look at what the experts are saying about home prices this year.
Forecast of U.S. housing prices
Ralph DiBugnara, the principal person in charge of Home Qualified, a U.S. housing transaction information platform, believes that the concept of deteriorating home buying conditions in the future may lead to a surge in housing demand in the short term, and in the process push up housing transaction prices. He believes:
"This sense of urgency is spurred by concerns about interest rates rising further and more homes coming to the market, as more sellers want to cash in on properties they have bought over the past few years."
At the same time, Greg McBride, chief financial analyst at the personal finance platform, predicted that housing demand may be about to decline. However, Greg is not sure whether the lack of housing supply will support a corresponding fall in housing prices. He believes:
"Even home construction activity is cooling due to supply constraints and falling demand. However, although the market is cooling, house prices will not necessarily fall. Subsequent house prices are still likely to be higher than 6-12 months ago 15%-20%.”
Finally, analysts at Zillow Research believe that U.S. home prices may rise by 11.6% between May 2022 and April 2023. That's actually a revised forecast, down from March's forecast of a 14.9% gain. Analysts believe the deteriorating home-buying environment will reduce demand enough to slow down the market's current rate of price increases. They believe that it is less likely that U.S. housing prices will fall, and that it is more likely that housing prices will rise more slowly.
For more views on real estate investment in the United States, welcome to review: "What will happen to U.S. housing prices during the economic recession?" Will it collapse or continue to rise? 》
Creation is not easy, your four-click one-click is the greatest support for the editor! Welcome to share your joy in the comment area below, please pay attention and don’t get lost in the next update! The picture comes from the Internet and has been deleted.
Author: Linggu Weibu
Editor: Cai Caijun
