At the same time, the more expensive parts of the US are adjusting to lower prices.
Yun anticipates that the Fed’s monetary policy will shift from tightening to neutral and then possibly to loosening (i.e. cutting rates) in the next 12 months, which will again sway the housing sector.
With that outlook in mind, the economist said “home sales will steadily rebound despite several months of fluctuations.”
Meanwhile, a new report from John Burns Research & Consulting said that demand among homebuyers could still come roaring back — but it would take rates on America’s most popular mortgage to hit the magic number of 5.5%.
In a recent survey, 62% of consumers told the firm that a “historically normal” rate clocks in at that level, and nearly two-thirds said they wouldn’t be willing to buy a home with rates above that mark.
Currently, the 30-year fixed-rate mortgage is hovering above 6%, and stands as one reason why more than half of consumers believe it’s a bad time to buy a home right now.
“Affordability remains the key constraint on home sales,” Pantheon Macroeconomics’ economist Ian Shepherdson said Thursday.
“We estimate,” he added, “that seasonally adjusted median existing home prices have fallen by a total 3.3% since the summer, but they need to drop much further before the market clears.”
7. Investors anticipate a recession ahead, lingering inflation, and more rate hikes from the Fed, according to a new JPMorgan survey. Nearly 90% of respondents see a downturn materializing by the first quarter of next year, and investors want to reduce risk in China more than anywhere else. Get the full details.
8. A 23-year-old realtor explained the key tip that’s allowed him to negotiate home prices down by up to $129,000. Even in a tight market, this home expert still sees potential to save money on interest rates. See every part of his strategy here.