Housing prices aren’t expected to fall any time soon, even with rising mortgage rates and a slowing market.
Mortgage rates are historically high at 5.3%, up significantly from 3.11% at the end of 2021. This increase means that home buyers can expect to pay more in interest in the long run, and a higher monthly payment from the beginning.
Though the number of home sales has decreased in the last few months, housing prices are not going down, though they aren’t rising as rapidly as before.
In June 2022 mortgage applications were 12% lower than June of last year, the Mortgage Bankers Association found.
The National Association of Realtors consequently found that existing home sales have dropped. Total existing home sales fell 5.4% from May to June. Since June 2021, sales have gone down 14.2%.
Even though the number of home sales has fallen, the price of a home remains high due to a lack of inventory.
“We still do not have enough inventory for demand—40% less. Still in favor of the seller but not totally nuts,” says JPAR Real Estate CEO Mark Johnson.
Developers broke ground on 982,000 single-family homes in June, a 19% decrease since February 2022 and 16% decrease since June 2021, Forbes reports.
Less inventory could keep home prices high.In June, the median price for existing homes was $416,000, while last year at the same time, the median was $366,900—a 13% increase.
