The US housing market is slowing after hitting all-time highs. Home prices soar to all-time highs, mortgage rates drop to historic lows.
Demand and price growth have slowed, but analysts and housing economists expect any correction to be minor.
Ryan FrazierCEO Arrived homesummarizes the consensus among housing experts as:
It took longer than expected for the real estate market to start to fall. According to the National Association of Realtors (NAR), the median home price will exceed $400,000 for the first time in the spring of 2022. Prices have risen about 40% since the start of the pandemic, with price increases up to 70% in some markets, according to NAR data.
With bidding wars gone, inventories dwindling and interest rates rising as the Fed fights inflation, potential buyers are avoiding the market.
“The Fed has a lot of control over housing demand through interest rates, so I look forward to seeing what the Fed decides in the coming months,” Frazier said.
The average homebuyer spent 77% more on a loan in October than a year ago, according to Realtor.com, due to higher home prices and higher interest rates.
That’s an asking price of $425,000 plus a 10% down payment, which adds up to $1,117 per month.
Frazier said his firm believes that timing the market is very difficult and therefore the best way to maximize investment is to have a long-term mindset of buying and holding. said he was thinking.Check out how you can Earn passive income by investing in rental properties for as little as $100 and build wealth in the long run.
Unlike 2008, housing economists agree that house prices could fall, but probably not as severely as the Great Recession’s housing adjustment.
Mr Frazier said the housing industry has institutional money to support the market, but that didn’t exist in 2008.
He said homeowners should be able to service their debts without issue given tougher credit requirements, unlike 2008 when supply from homeowners unable to pay their debts increased significantly. .
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