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When will house prices go down? These economists say prepare for a ‘prolonged slowdown' ‐ and big declines in home values
I can almost hear the 'Red State' yawning.[Market Watch] The real-estate market is taking a beating, with mortgage rates surpassing 7%. "Rates are still rising, and will continue to rise here on out," Christine Cooper, chief U.S. economist and managing director at CoStar Group, told MarketWatch in an interview. But with home prices continuing to be elevated, that has really hurt affordability, she added, and pushed buyers out, which will hurt home sales. And "it’s going to continue until we’re gonna see some price declines," Cooper said. "And we’re seeing signs already." Sellers were holding out hope that the situation may improve, Ali Wolf, chief economist at Zonda Research, a housing market-research platform, told MarketWatch in an interview on the Barron’s Live podcast. "What we’re hearing from the sellers’ side is that they definitely feel nervous that they’ve seen demand fall off," Wolf said. Builders and realtors initially thought that demand would slow, then recover, she added, but as rates continue to climb higher and consumers pull back, they’re seeing the writing on the wall. In a recent survey by Fannie Mae FNMA, -4.50%, sentiment among home buyers dropped to the lowest level since 2011: 75% of respondents said that it’s a bad time to buy a home. They’re saying "It’s not just a couple months, this may be a prolonged slowdown in the housing market," Wolf said. WILL HOME PRICES DROP IN 2023? Most economists are forecasting home-price appreciation to slow, and it has. Home prices, in fact, fell slightly on a month-over-month basis. Posted by: Besoeker 2022-10-17 |
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