There’s a growing consensus that US home prices will slide or crash in 2023.
But the director of real estate research at the National Association of Realtors doesn’t believe it.
Here are three reasons why there won’t be a housing market crisis this year.
Here are some highlights as reported by James Faris on Feb 13, 2023:
Perhaps even more surprising than last quarter’s home price growth is Evangelou’s belief that US home prices will defy the consensus expectations by staying elevated throughout the year.
There are three reasons why the US housing market is unlikely to see widespread price declines in 2023,
- home inventory remains low,
- mortgage rates are falling, and
- pending home sales are rising.
Students in Econ 101 could explain the first point: a limited supply of houses nationwide creates scarcity that should keep supporting prices, despite the fact that there are fewer homebuyers.
Demand for homes has started to dry up because borrowing costs remain uncomfortably high, putting home ownership out of reach for millions of families. Thirty-year fixed mortgage rates rose to the highest level in two decades in late 2022 while the Federal Reserve rapidly raised interest rates to try and get historically high inflation under control.
But mortgage rates have since fallen from their mid-November peak of 7.1%
“There’s already evidence that lower mortgages are starting to bring homeowners back… Pending home sales rose in December for teh first time in several months”
Indeed interest rates have fallen back down to near 6%
Source: Business Insider
Editors Note: While we have no idea what will happen to the housing market, when we have credible well vetted resources to help dispel fears and anxiety, we are happy to share this positive news.