With mortgage rates around 7%, here’s the forecast for home prices in the year ahead
By Aarthi Swaminathan
October 25, 2022
Home price growth is expected to remain flat this year, and that’s potentially good news for homebuyers, according to one expert at the annual Mortgage Bankers Association conference happening this week in Nashville, Tenn.
“
“
Our forecast is for home-price growth moderation to continue.
– Joel Kan, vice president and deputy chief economist at the Mortgage Bankers Association
Home prices are already moderating, falling month-over-month June to July for the first time in 20 years, according to Case-Shiller.
Recession fears are hurting housing prices, and high mortgage rates are affecting them too.
The 30-year fixed rate averaged
6.94%
6.94%
the week ending Oct. 22. That’s up from
3.85%
3.85%
a year ago. The MBA says it expects rates to come down to 5.4% by the end of 2023.
National home-price growth is expected to “flatten out” in 2023 and 2024, Kan said, which may be good news for some as it brings home prices back to more “reasonable levels.”
Kan also warned that some markets could even see home values drop, like in pandemic boomtowns Austin and Phoenix.
Still, even with price drops, there may not be an inventory surge. Some homeowners are reluctant to move because they’re sitting on ultra-low mortgage rates that they probably won’t see again in the near future.
Sellers also may not be eager to sell their homes right now because they see others forced to cut asking prices to entice buyers.