As mortgage rates climb beyond 6%, prospective buyers are putting their home purchasing plans on the back burner while homeowners are becoming more hesitant to list their properties and enter into the opposite end of a volatile housing market as buyers. Despite waning homebuyer demand and a lack of new inventory, home prices continue to reach new highs across the U.S., and experts warn that it may take a recession to bring them down, Redfin reports.
During the four-week period ending September 18, the median home sale price rose 8% year-over-year to $371,850, but prices in some popular metros like San Francisco, CA, Oakland, CA, and Buffalo, NY are rebalancing after reaching unsustainable levels during a mid-pandemic homebuying boom.
“There has been a lot of talk of a ‘new normal,’ but what’s happening in the housing market feels more like a ‘new weird,’” said Redfin Deputy Chief Economist Taylor Marr. “The impact of the Fed’s inflation-curbing strategy is seen clearest in the housing market as prospective buyers take a big step back, slowing sales. But since the vast majority of homeowners who might consider moving have a mortgage rate far below current levels, there’s very little new supply hitting the market. As a result, home sale prices have picked up in recent weeks, and the typical buyer’s monthly mortgage payment is just a few pumpkin spice lattes shy of its all-time high. The irony is that it may take renewed fears of a recession to bring some relief to buyers in the form of lower prices.”
Advertisement
Related Stories
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development
Sustainability
Which Green Building Practices Are Home Builders Using Most?
A recent report reveals which green-building practices are most popular among single-family home builders and remodelers