Home News The Housing Market Is About To Be Hammered – 24/7 Wall St.

The Housing Market Is About To Be Hammered – 24/7 Wall St.

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The housing market has made a remarkable recovery from the start of the COVID-19 pandemic. Nationwide, prices are up 20% year-over-year for most months, leaving room to follow the S&P Case Shiller Price Index cautiously. The rise was driven by low interest rates and American liquidity fueled by a “work from home” economy. Those days may end as the housing market shifts to volatile conditions.

Mortgage rates for most of 2021 and early 2022 have fallen to below 3% for 30-year fixed mortgages. This has made housing more affordable. Demand in many cities was also driven by the fact that people moved from where they should live to where they wanted to live as offices closed due to the spread of COVID-19. Many of these people moved from very expensive coastal cities like New York, San Francisco and San Jose. Median home prices in San Jose topped $1 million earlier this year, the highest in the nation.

Demand for housing is starting to weaken, largely because mortgage rates have risen above 6% for the first time in years. Homes that were once affordable are now well beyond the financial budgets of many potential homebuyers in the United States.

Not all cities will see home prices fall, but the rate of increase is likely to slow further. Realtor.com recently announced that “The housing market is about to take a hit: What homebuyers, sellers need to know

Until recently, some homes for sale in attractive markets often had multiple bidders paying more than the asking price. Those days are almost completely gone.

The authors of the Reator.com study point out that the Fed’s decision will continue to push mortgage rates higher. His 5.89% interest rate in early September could look like this: %, higher than it was more than two years ago. “

The markets most likely to correct are those where home prices have skyrocketed in the last year. This could include at least Boise, Tampa, and Miami.

What undermines rising interest rates? High unemployment caused by rising interest rates. This could lower mortgage rates, but reduce the number of potential buyers.

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