Those Surging Home Prices May Not Totally Be A Bubble : Planet Money : NPR - Daddy Tv

Properties typically remained on the market for 25 days in November, up from 23 days in October and 24 days in November 2022. Sixty-two percent of homes sold in November were on the market for less than a How to buy ergo month, according to NAR. Gumbinger agrees that waiting until 2025 for market conditions to improve may not be the best home-buying game plan since there are no guarantees.

What could cause house prices to fall?

“It may be a five-to-10-year-long slog before you get back to a housing market that starts to resemble what we’ve had in the past,” she added. Boston was the second-slowest market and saw a nearly 38% drop in homes changing hands from five years ago. Zhao said a market where 30 to 40 of every 1,000 homes changed hands would signify a healthier housing landscape. Morgan research reports related to its contents for more information, including important disclosures. This problem helps explain why pending home sales fell in May to a record low, according to data released on Thursday.

Home prices would also likely soften due to fewer eligible buyers and less competition. In the meantime, begin researching areas where you would like to live and can afford, track mortgage interest rates and save money for a down payment. Use a mortgage calculator to determine your estimated monthly mortgage payment. Hepp says that buyers will return, but demand will depend on how much mortgage rates decline and the level of severity of the forecasted recession. On top of that, Hepp says many people who bought their house over the past two years and locked in ultra-low mortgage rates are unlikely to move anytime soon, putting additional strain on available inventory.

1. While this latest data suggests a potential downward trend for the remainder of 2024—and beyond—experts remain vigilant, monitoring multiple economic variables that could introduce stress in the housing market.
2. Divounguy says “getting on the housing ladder” is worthwhile to begin building equity and net worth.
3. On the other hand, if the durability of the recovery has been overestimated and a recession is on the way, home prices could tumble and affordability would ease.
4. “So the economics of supply and demand, if there’s a shortage, prices simply cannot crash.”

In other words, it’s changed their fundamentals, especially considering the suburbs haven’t been willing to build lots of new housing to accommodate new demand. Meanwhile, the Fed has signaled that it’s probably done with rate hikes and is forecasting three rate cuts in 2024, a blueprint that, if carried through, would notably lower mortgage rates. Experts have told CNN previously that there really isn’t a magic fix for America’s woefully unaffordable housing market, and that a solution could take time and a lot of effort from all stakeholders.

When will the ‘silver tsunami’ impact housing prices?

But if supply is also relatively high, a moderate drop in demand could cause home prices to go down. Another indicator of housing market stress is an increase in foreclosure activity. But in a recent report, real estate data firm ATTOM said that foreclosures were down 11% year over year in August. J.P. Morgan Research analysts predict that a major market crash does not lie ahead. The housing market is in a much healthier place than it was in 2008 and while the U.S. may face an economic downturn, lending has tightened considerably. With supply remaining so stretched, the likelihood of a property market bubble is low.

No silver bullet for the housing market

Though a burst of new home construction has helped to bolster inventory, it hasn’t provided enough supply to meet demand. Another reason for the tight housing inventory is that people are living longer. The country has an acute housing supply problem—and likely will for a while.

Is the housing market going to crash? What experts say about the possibility in 2024

The average home value in the U.S. is $361,282, according to Zillow — up 2.9% year over year. Last month, average 30-year mortgage rates fell to 5.74%, the lowest they’ve been in over two years. Rates have been slightly higher in recent weeks, but remain relatively low. Chodorow-Reich and his colleagues see something similar in the boom and bust in the U.S. housing market between 1997 and 2012.

There’s a lot of pessimism around homebuying that’s led many would-be buyers to resign themselves to a life of renting. In March 2020, the economy experienced a flash-freeze depression in the face of a normalcy-destroying virus. The economy ground to a halt and homebuilders, scarred by the housing crash of 2007, pulled back. “Builders remembered what happened in 2007 and 2008 as a near-death experience,” Tracy Alloway, a financial commentator, told me on my podcast, Plain English. But there’s also a lot of uncertainty about the future of remote work, and it’s possible people are over-optimistic about these fundamentals. It’s possible homebuyers are overestimating future demand to live in the burbs, or maybe people are overestimating the continued importance of superstar cities.

She also says to expect more buyers in the market in the last stretch of 2024, predicting mortgage rates to slide closer to 6% and new homes to face more competition amid rising resale inventory. The latest NAR data shows inventory ticked up slightly month-over-month, rising atfx trading platform 1.5% between August and September and a whopping 23% from a year ago. At the current monthly sales pace, unsold existing inventory stands at a 4.3-month supply. Most experts consider a balanced market between four and six months.

While most experts expect the housing market will come back into balance, there are warning signs for what a complete guide to the futures market may lie ahead. For existing home sales, Zillow forecasts 4.3 million in the coming year, up slightly from 4.1 million in 2023 and a projected 4 million in 2024. Zillow said Americans can expect to see more sales and only modest home value growth in 2025 as the market slowly becomes unstuck.

My crusade in the last decade was about ensuring lending standards are never eased because standards are already liberal today, but not crazy anymore. None of that action has been happening for 14 years because the credit market changed after the 2010 qualified mortgage rule. Now, most loans are 30-year-fixed mortgages and people’s wages rise almost every year. This is the kind of information you need as we get close to Thanksgiving and share the dinner  table with Uncle Dave who says (for the 13th year) that we’re seeing 2008 all over again. This is the person who says everyone should sell their homes so they can rent while they wait until home prices crash. However, I will give you all the charts to show Uncle Dave that housing credit doesn’t look like it did in 2008 because the qualified mortgage (QM) law makes that impossible.