Home News 3 economists predict when competition in the housing market will decline

3 economists predict when competition in the housing market will decline

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When will competition in the housing market diminish?

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Mortgage rates on 30-year fixed-rate loans have risen from about 3.5% earlier this year to more than 5.6%, and professionals say they could be even higher (“See the lowest mortgage rates you can qualify here). According to CoreLogic, home prices are also rising steadily, rising about 20% from March 2021 to March 2022.

The news undoubtedly encounters moans among aspiring homebuyers. But we have some good news for you: there are signs that competition in the housing market may be cold, professionals say.

Redfin Home buyer competition reportedly declined slightly in March 2022 for the first time in six months. 65% of homes sold by Redfin agents faced competition (or multiple offers) in March 2022, down from 67% in February. “We expect competition to continue to decline,” said Taylor Mar, Deputy Chief Economist at Redfin.

Ma cites multiple reasons, including rising interest rates — the current average of 30-year fixed-rate mortgages is over 5.6% — federal reserve policies move to reduce inflation and baby booms. Generations are in conflict with the post-retirement community and Ukraine. “Housing is still above the selling price, but the market is changing,” says Ma. “If you replace the thermostat, it will take some time to cool down.”

Lawrence Yun, Chief Economist at the National Association of Realtors, recently shared with MarketWatch Picks and witnessed the competition waning soon. market. Competition may decrease after the summer buying season is over. “

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By the end of summer, Ma agrees that there will be less competition among buyers for listings and more homes on the market. However, he warns that competition on the list could continue to intensify in certain hot-migrant areas, including cities such as Tampa, Phoenix, Nashville and Atlanta. “Even in the face of very high interest rates, there are still many people moving to these places,” he says.

Competition intensifies at the end of the summer when Tomo’s chief economist Skyler Olsen predicts that the market will cool. “We are in transition,” she says about what is happening now.

Buyers shouldn’t suddenly expect big deals, even if the housing market shows signs of cooling in the coming months. As MarketWatch Picks recently reported after talking to five economists that home prices are unlikely to fall significantly. “Housing prices continue to rise because there aren’t enough homes to meet demand, but the combination of rising home prices and rising mortgage rates means fewer people can buy,” he said. Loan expert Holden Lewis told us Nerdwallet.

However, just because economists predict that interest rates will rise does not mean that buyers should commit themselves to the bidding war just because they are in a hurry. “If you find a unit that suits you and you know it’s a place to stay for a long time, you need to move forward,” she says. “But you don’t have to hurry to keep prices down.”

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