Is the housing market “crashing” this Fall? Well, not exactly. The soaring housing prices are expected to decrease more and more as we approach the end of 2022. Because federal mortgage rates continue to creep higher and higher, homebuyers are receding and being priced out of home ownership.
And with this trend plaguing so many buyers, sellers are being coerced into slashing home prices and offering greater concessions to entice buyers.
As of the first week of September, the 30-year mortgage rate is at 5.66%. This is a lock-out move for first-time buyers who cannot afford the rising mortgage rate. Only a year ago the 30-year mortgage rate was 2.79%. Buyers must also consider that investment buyers are waiting on the sidelines to jump on the competitive market, as well.
House prices will continue to adjust because many sellers do not have the ability to sit on their listings until the ideal time. Life circumstances in which sellers are required to sell their homes as soon as possible, regardless of the market, will be a huge incentive to the housing market price decrease. Home prices will likely decrease about 5% nationwide in the coming months. However, many “pandemic boomtowns,” cities where migration happened during the pandemic, prices will drop more significantly as those migrants return to the coasts that they came from. For example, a $500,000 home in Helena, Montana will likely see a price drop of about 10%-15%. Large price corrections will likely occur throughout the midwest, southwest, and southeast of the United States.
In accordance with price correction theory, Redfin reported that 70% homes in Boise, Salt Lake City, Denver, and Tacoma have already had their prices slashed in the past month.
The same Redfin report noted that as pricing pressures became more prevalent, the company average home sale was sold for less than its list price for the first time since March of 2021.
Additionally, Realtor.com reported that one in five homes in the United States have had their prices slashed and that the median home listing price has fallen to $435,000, an average that was previously at $450,000 in June.
Don’t worry, though! The only way to combat this tumultuous market is a well-informed and professional real estate agent. Luckily, at Brandon and Lana team we have plenty of great agents who are not only top professionals, but are plugged into the market and all of its ups and downs. Call or email us today to see what is possible for you and let’s get to work on your new dream home! Connect with us!
