If you’ve been holding off on buying a home because prices are outrageous, there’s good news on the horizon.
Housing prices have been heading lower throughout the latter half of 2022 and may drop as much as 20% through the beginning of next year.
Of course, part of that drop is because interest rates are now outrageous – but it’s still good news long term for hopeful homebuyers.
Also driving the drop is a lowered demand for homes as people stopped being willing to fight over overpriced homes and stayed put to see what would happen with the market over time.
Ian Sheperdson, the chief economist of Pantheon Macroeconomics, said in a report this week, “We expect home sales to keep falling until early next year. By that point, sales will have fallen to the incompressible minimum level, where the only people moving home are those with no choice due to job or family circumstances. Discretionary buyers are disappearing rapidly in the face of the near-400 [basis points] increase in rates over the past year.”
To combat inflation, the Federal Reserve hiked interest rates up, leaving the average mortgage with a 6.94% interest rate. Some experts anticipate the climb to continue to as high as 8.5%. As the Fed desperately fights inflation, how high they will go is anyone’s guess – but eventually, they will have to come back down.
If that dip coincides with lowered house prices, it could be the chance that so many are waiting for.