“Supported by near-zero borrowing costs and a rush by existing homeowners to find more space, average U.S. house prices have soared by over one-third since the pandemic started,” according an article published by Yahoo! Finance. This probably doesn’t come as a surprise to any Americans who have been house hunting over the past several months and years. With rising inflation costs and continued increases in mortgage rates, may experts are speculating what may be in store for home prices.
A poll of almost 30 property analysts revealed that Americans can expect to see home prices continue to increase by just over 10% in 2022. Further, home prices are predicted to slow below increases of only 5% in the following year and again in 2024. Reporters Indradip Ghosh and Prerana Bhat quote Brad Hunter, head of consultancy Hunter Housing Economics, “The rise in home prices has been staggering, and we do expect a significant slowdown going forward, particularly in the wake of a near-doubling of mortgage rates”.
Despite the slowing of home price growth, which is currently at a pace of 20% increase, affordability is predicted to still be an issue for many, specifically first time home buyers. The rate of inflation, rising mortgages rates and, although declining, the steady continued rise in home prices are huge stumbling blocks for those looking to become home owners. In fact, almost all of the 29 analysts polled predicted overall affordability will worsen over the next two years.
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Photo Credit: Mohd Azrin