The housing market in the United States continues to challenge many home buyers. The U.S. Department of Commerce announced on April 19 that single-home construction permits in the United States fell in March, while data released on April 18 revealed that confidence among homebuilders fell to a seven-month low in April.
According to Lawrence Yun, the National Association of Realtors’ chief economist, Reuters reports that mortgage rates will climb further. She predicts a 10% decline in home purchase transactions this year and some readjustment in house prices to follow.
According to Yun, a rise in mortgage rates and an increase in the cost of living are taking a toll on the housing market, although home sales are currently brisk and home price increases are in the double digits.
According to the Epoch Times, the National Association of Realtors (NAR) recently reported the median price of a previously inhabited property rose to $375,300, a 15% increase from a year earlier and a new record high.
The Zillow home value forecast now calls for 14.9% growth through March 2023, down from the 16.5% growth forecasted in February. Zillow predicts a 5.5% growth in home values over the next three months, down from a 5.9% growth in the previous month’s forecast.
COVID cases have decreased, and economic activity has resumed, which has led to a rise in inflation and interest rates from the U.S. Federal Reserve. Mortgage rates are likely to impact home values shortly, according to Managing Director at S&P DJI, Craig J. Lazzara.
Epoch Times reports a quarter-point interest rate increase is “on the table” when the Federal Reserve meets in May.
WSJ reports that the Fed is scrambling to manage inflation at its highest level in 41 years, and Powell said it would be prudent to “be pushing a little more quickly” to tighten monetary policy.
International Business Times reports Mortgage Bankers Association (MBA) Associate Vice President of Economic and Industry Forecasting Joel Kan said that the recent rise in mortgage rates has “locked most debtors out of rate/term refinancing or modification, allowing the refinance index to decrease for the sixth consecutive week.” Kan continued, “Affordability issues and low availability in the housing market are prompting a pause or delay in demand for homes.”