Throughout 2022, spiking mortgage rates not only weakened housing affordability, but they also led to a significant drop in homebuyer demand, sending mortgage purchase applications down 40% year-over-year in December. For the last several months, however, rates have been inching back down from peak highs, and that slight improvement may motivate buyers to ease their way back into the for-sale market, Fortune reports.
Over the past two months, the average 30-year fixed mortgage rate dropped from 7.37% to 6.09%, leading to a slight uptick in demand, though housing experts say home prices will need to fall by another 6% or 7% to boost affordability and sustain normal levels of demand.
Through October, the Case-Shiller National Home Price Index has U.S. home prices down 2.4% from the June 2022 peak. In 2023, Capital Economics expects U.S. home prices to fall 6% while the average 30-year mortgage rate slips to 5.75% by year end. Peak-to-trough, Capital Economics expects U.S. home prices to fall between 8% to 10%.
Advertisement
Related Stories
Market Data + Trends
10 States Where Home Insurance Rates Have Risen the Most
Responding to the increasing number of natural disasters, insurers are hiking prices, with some states bearing the brunt more than others
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
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
