The housing market faces challenges with nearly 7% mortgage rates and home prices 55% higher than early 2020. Builders are hindered by high costs and a labor shortage, while housing inventory is insufficiently rising. An Oxford Economics report indicates continued deterioration of the market this year. Existing home supply approaches pre-pandemic levels due to high prices and elevated rates, keeping buyers sidelined. Sellers may withdraw homes from the market if expected sale prices are not met, affecting inventory and pricing dynamics.
Mortgage rates are still nearly 7% and home prices are 55% higher than they were at the beginning of 2020, according to the Case-Shiller U.S. National Home Price Index.
The supply of existing homes for sale is approaching pre-pandemic levels as a combination of high prices, elevated mortgage rates, and concerns over the labor market keep buyers sidelined,
A longstanding lack of inventory has supported both high prices and sluggish sales in the market for existing homes.
Sellers will have less ability to pass along price increases. Sellers will keep pulling their homes off the market if they can't get a sale price they think they deserve.
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