
The US housing market is currently in the midst of a major change. After two years of stratospheric appreciation, housing costs have bottomed out and are coming down.
A question that comes up a lot is how much more will prices drop?
The more accurate answer is that there is a chance that prices could drop further, but not as much in comparison as what they did in the housing fall.
From 2006 to 2012, national home prices collapsed 27%, according to the S& ;P CoreLogic Case-Shiller, who measure US home prices
“It was different in 2008, 2009 because that drop in prices was due to a push from sellers,” he said Jeff Tucker, a senior economist at Zillow. “Because of foreclosures and short sales, there were a lot of extremely motivated sellers who were willing to take a loss on their homes.”
Next, this real estate collapse was caused at a time when the inventory of homes for sale was four times greater than at the moment. On the new list it continues to be lower than pre-pandemic levels, which has led to increased competition. For this reason, prices remain more stable.
“I would be surprised to see prices fall below where they were in 2019,” Tucker said. “There was some overheating in the housing market in 2021 through this spring that pushed prices above what fundamentals would support. Now they are going down.”
Mortgage rates double since the start of the year, operations for a homebuyer have changed in a big way . The payment of a monthly mortgage with principal interest in the house and of average price rose to US $ 930 with respect to last year, this is an increase of 73%, this with a source in a company of mortgage data called according to Black Knight.
When taking into account rising mortgage rates, along with rising home prices and rising wages, aren’t increased as soon, buying a home is less affordable now than it has been in decades.
Goldman Sachs economists expect housing costs to decline 5-10% to peak rising in June. Next, Wells Fargo recently reported that national median single-family home prices will be down 5.5% year-over-year by the end of 2023.
Economists predict the median cost of a single-family home will be $385,000 this year, up 7.8% more than last year, although growth will slow, due to the 19% year-on-year growth seen in 2021.
In addition, they report that the median home price will drop to US$ 364,000, a drop of 5.5% this year . They report that costs will be reacquired and will rise in 2024, with median price rising 3.3% to $376,000 by the end of 2024.
Ultimately, the driver behind the housing market’s adequacy thus far has been fairly rising mortgage rates , say Wells Fargo researchers. If the Fed rate cut forecast is true, it is possible that mortgage rates will decline slightly as inflation pressures cool off by raising real income growth. Next, an improvement in the increase in sales should be made present, which will generate a new alternative in terms of housing prices compared to 2024.