If you’re keeping your fingers crossed that home sales prices will drop in the near future, you might want to brace yourself for some disappointing news. Despite the continued challenges buyers are facing in the housing market, all signs indicate that the housing market will remain difficult for buyers in the near future. Despite recent increases in mortgage interest rates, real estate analysts expect the United States to remain a seller’s market over the next two years, according to a new Reuters poll. This means for potential buyers that house prices could continue to rise during this period, especially if inventory levels remain low.
And that is precisely what should happen. Not only do analysts polled by Reuters expect the housing market to remain in sellers’ favor over the next two years, but they also expect U.S. housing prices to rise another 10.3% in 2022. sale – and it should come just after a banner year for house prices. Last year, a combination of historically low interest rates, extremely low housing inventory and pandemic-driven buyer demand sent home prices skyrocketing by more than 17% on average. . This was the biggest annual increase the housing market has seen in at least two decades – and the increase predicted for 2022 will only add to the high cost of housing nationwide.
Nor were these price and market forecasts the only surprising turn of events to occur in the housing market this week. At the end of February, the average 30-year fixed-rate mortgage rate climbed to more than 4% for the first time since 2019. The Federal Reserve had also clearly signaled that an interest rate hike would likely occur in a near future. But on March 1, mortgage rates took a downward turn, dropping to 3.9% from 4.18% the previous week. This was due, at least in part, to the Russian attack on Ukraine, which caused markets to fall and, as a result, an unexpected drop in mortgage rates. While lower interest rates are generally a good thing for buyers in a normal market, making it cheaper to borrow money, this further interest rate cut could push more potential buyers onto the market. This could make it even more difficult for buyers to acquire properties at a time when inventories are at record highs. Any subsequent decline in interest rates would likely only aggravate the current problems in the housing market.
To help you stay up to date on the housing market, ZeroDown has compiled a weekly housing market report using data from Redfin. The statistics are for the four weeks ending February 27. Metros with more than 50 homes sold during this time period were considered for metro-level rankings for each statistic.