Home News House prices will soon undergo a ‘correction,’ says Mark Zandi, chief economist at Moody’s Analytics — but not a ‘crash’

House prices will soon undergo a ‘correction,’ says Mark Zandi, chief economist at Moody’s Analytics — but not a ‘crash’

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The housing market is in recession, many economists saybut when will house prices return to reality? Soon, says one economist.

There is a mortgage interest rate higher edging, the buyer is withdrawing.More sellers are lowering listing prices and offering more goods concession invite buyers.

Moody’s Analytics chief economist Mark Zandy told MarketWatch that house prices will soon undergo a “correction” against this backdrop.

But the fix doesn’t mean it’s any closer to what happened in 2008. “That’s not what we have here.”

Zandy Appears on CBS News

Last month, the average house price was reduced tocompletely stalled

He said first-time buyers were “locked out” of the market and unable to afford rising mortgage rates.of 30 year mortgage is 5.66% As of Thursday. A year ago, 30 years he was 2.79%.

Investors are also sitting on the sidelines waiting for prices to fall. Home sales plummeted as buyers retreated.

“The crash is what happened in the financial crisis. It was a crash. That’s not what we have here.

— Mark Zandi, Chief Economist at Moody’s Analytics

“What happens next is that housing prices adjust,” Zandi explained.

He expects low-single-digit declines most of the time. about 5%.

However, market forces and living conditions that force sellers to sell their homes regardless of the market drive prices down over time.

“We’re going to see a significant price drop,” Zandi said of the “pandemic boomtowns that were previously booming in the west, especially in the mountainous west and south to southeast.”

Zandy said a $500,000 home in Boise, Idaho, could fall between 10% and 15% in value. He also sees significant price revisions in other once-popular cities like Charlotte, North Carolina and Austin, Texas. He also said Phoenix, Arizona is serious.overrated

Some of these markets are already showing signs of transformation. late August, redfin noted that 70% of homes for sale in Boise have already been discounted. Denver, Salt Lake City and Tacoma followed.

Early September, redfin said price pressures were widespread across the country. The company said the average home has fallen below list price for the first time since March 2021.

Realtor.com He said one in five homes had a price cut, lowering the median listing price to $435,000. The median listing price he hit a high of $450,000 in June.

Price adjustments take time. Sellers are reluctant to put their homes on the market. redfin Considering the cooling demand,

Thinking about the housing market? Write to MarketWatch reporter Aarthi Swaminathan ([email protected]).

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