According to Lawrence Yun of the National Association of Realtors, low interest rates, combined with a growing housing shortage, will lead home prices to rise in early 2023. Yun He spoke to CNBC Monday morning And while home sales will slow in 2022, median home prices in January 2023 will be 1% higher than a year ago.
The price of the house may be slightly higher or lower
Yun explained that while major cities like San Francisco and Seattle are seeing home prices fall, the real estate market is hot in “job-creating areas” like Atlanta. With a few exceptions like San Francisco, half of the country saw moderate price increases, while the other half saw prices drop by about 10%.
The direction of the housing market depends on external factors and trends, Yun said. A “persistently high” inflation rate is keeping mortgage rates high, but if inflation trends lower, mortgage rates “will be more attractive for the rest of the year”. In turn, buyers understand the long-term value of their homes, resulting in “steady growth” in home sales.
America is still creating jobs
Yun emphasized that the key variable determining the direction of the housing market is mortgage rates. Job creation is the second most important factor.
Overall, “America is still creating jobs.” This indicates that the demand for housing is “still rising”. Once mortgage rates fall, Yoon says homebuyers will come back, although it won’t be a frenzy with a 20% price increase. Fixed annual gains of 3%, 4% or 5% are more plausible expectations for years to come.
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