Home prices vary in the U.S. What does it mean for the housing market?
‘It’s a unique housing market,’ said Lawrence Yun, chief economist at the National Association of Realtors, concerning the the market at the moment
As some areas in the U.S. experience a drop in home prices while other areas see an increase, multiple news sources online offer predictions on how it will impact the house market.
The Washington Post said counties in the West made up 77% of the drop in home prices across the country.
This is happening after the home price spike throughout 2021-2022, when people moved to the West “in search of more space, a change of scenery and more affordable housing,” the Post said.
Lawrence Yun, chief economist at the National Association of Realtors, told CNN that about half of the country is experiencing housing price increases, however.
“Even in markets with lower prices, primarily the expensive West region, multiple-offer situations have returned in the spring buying season following the calmer winter market. Distressed and forced property sales are virtually nonexistent,” Yun told CNN.
The Post noted that “as rising interest rates have put mortgages out of reach for buyers struggling to find affordable housing,” prices dropped faster in large metro areas than in smaller cities and towns.
Forbes said high mortgage rates and home prices, and additional factors like inflation rates, weakening economic growth and an impending recession keep prospective homebuyers at bay.
A matter of timing
According to the National Association of Realtors, while the median existing-home sales price declined 0.9% from last March, “total existing-home sales dipped 2.4% from February to March and are down 22% from a year ago,” Forbes reported.
Forbes noted that Yun said in a report, “Home sales are trying to recover and are highly sensitive to changes in mortgage rates,” and “Yet, at the same time, multiple offers on starter homes are quite common, implying more supply is needed to fully satisfy demand. It’s a unique housing market.”
Yun told CNN, “Home sales are bouncing back and forth but remain above recent cyclical lows,” and “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.”
Conrad DeQuadros, senior economic adviser at Brean Capital in New York, told Reuters that there’s substantial evidence suggesting “the housing market may have largely adjusted to the higher level of mortgage rates but the decline in the median home price is consistent with the hypothesis that home builders may be tailoring the construction of new homes towards first-time buyers.”
Danielle Hale, chief economist at Realtor.com, told Forbes, “If current economic conditions persist, with elevated mortgage rates and home prices amid scarce inventory, the market is likely in for a long, slow climb and a few bumps along the way.”
The Deseret News previously reported Utah ranked in the country’s top 10 most difficult places for first-time homebuyers, with the most affordable states being West Virginia, Mississippi and Arkansas.