
There were many potential buyers who had great expectations for the US housing market. To stay up to date, follow US housing market news.
Already at record highs, home prices have continued to soar, and mortgage rates have increased much more quickly than anticipated. While some buyers have continued, others have put off starting their home search or have given up altogether since the growing costs have made owning a home unfeasible.

However, the US housing market is exhibiting indications of weakening as concerns about a recession for the overall economy grow. New construction home sales are declining, and work is coming to a standstill. Existing-home sales are heading below 2019 levels and have decreased. Mortgage application volume has dropped to its lowest level in 22 years as long as rates are above 5%.
US Housing Market News
According to experts, neither mortgage rates nor housing prices will decrease, so it’s likely that home ownership will remain out of reach for the rest of the year. Even if housing price increases are slowing down, they are still increasing by double digits every year. Mortgage rates will continue to fluctuate as a result of this week’s rate increase by the Federal Reserve.
As per Zillow’s chief economist Skylar Olsen, affordability is currently the top problem in the housing market, and higher rates will make it worse on a monthly basis.
US Housing Sales
The biggest shock for individuals trying to purchase a home in the first half of the year was how quickly and dramatically mortgage rates increased. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage increased from 3.22% at the beginning of January to a high of 5.81% in June so far this year. Average rates have stabilized recently at around 5.5%.
According to Lawrence Yun, chief economist for the National Association of Realtors, “someone buying the identical house now that they intended to buy last year will see a 50% rise in their monthly payment.” “Incomes do not increase by 50% in a single year. Home buyers are dissatisfied. They can’t believe they don’t have the money to buy at a 6% mortgage rate this year.
Redfin claims that due to the high cost of financing, more than 15% of consumers who went into a contract to buy a home in June canceled it. Since April 2020, when the outbreak essentially caused the market to freeze, that is the highest percentage of abandoned home transactions.
However, Yun claimed that although mortgage rates may gradually increase or decrease in the months to come, the greatest increases have already occurred.
“We might be reaching the peak for mortgage rates”, he said.
Mortgage rates may have already “priced-in” a significant portion of the Fed’s projected future interest rate increases, according to Yun. By the end of the year, he predicts that mortgage rates will stabilize at around 6%, and that home sales will return to normal.

US Real Estate Market
With less competition and more options available as the market slows, prospective homeowners will have more breathing room than in the frenetic market of the previous two years.
For the first half of the year, economists’ predictions for home prices were basically accurate; the yearly price rise peaked in the spring and has since moderated. However, according to Jeff Tucker, an economist at Zillow, the number of sales at this stage of the year is far lower than anticipated.
Prices have been impacted considerably harder than sales volume, he claimed. “Buyers endured that mortgage rate rises for a longer period of time than we anticipated, which kept prices high. But some customers started to back out.
Yun said he anticipates 2022 sales will be down by about 13% from last year. As a result, inventories will increase, according to Tucker, as sales volumes continue to decline.
Rising house buyer demand over the previous two years resulted in a record-low supply of available properties, which raised prices. Inventory experienced its first year-over-year improvement in June in three years. According to NAR, the number of houses up for sale at the end of June increased by 2.4% from a year earlier and 9.6% from May.
Median Home Price USA
In June, the median cost of a home surpassed its previous high of $416,000.
But lately, the rate of price growth has slowed. In contrast to the 23% increase in home prices in June 2021, the median price of existing homes increased 13.4% in June from the previous year.
In addition, the cost of newly built homes is really going down. According to the US Census Bureau and the Department of Housing and Urban Development, the median sales price of a newly built home decreased to $402,400 in June from $444,500 in May.
According to Navy Federal Credit Union’s corporate economist Robert Frick, “this is the largest breach in home-price inflation yet.” The annual rises that have driven millions of Americans out of the housing market may finally come to an end if current home prices follow suit.
Properties under construction make up around 10% of transactions, with existing homes making up the remaining 90%. Additionally, prices aren’t dropping for the great bulk of the market.
Yun predicted that property prices will increase by 11% this year. That’s more than he had anticipated at the start of the year but less than the 16.9% increase from 2020 to 2021.
Inventory will increase and sales will decrease as rising mortgage rates dampen buyer desire, which should help prices moderate for the remainder of the year.
Homes might stay on the market for longer, and there will be more homes with price cuts, according to Yun. The ability to find a home with a price drop or obtain a better price negotiation may be enhanced by the buyer’s deeper research.
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Will US housing market Drop In 2022?
Home price growth is expected to decelerate this year, from 17.8% last year to 10.4% in 2022 and 5% the next year, according to Freddie Mac’s forecast.
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Is it smart to buy a house right now?
According to the National Association of REALTORS, there was the largest gain in home prices since 1999 in 2021, when they increased 16.9% over 2020. Additionally, according to Zillow, home prices will continue to rise in 2022, rising by 17.3% by January 2023.
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Is the US housing market going to crash?
Housing prices won’t fall, despite what some people may believe. “But what we’re really seeing is that things are really starting to balance out a little bit faster than we may have expected if interest rates hadn’t risen so quickly.” Even more of a surge in housing costs was seen in other US markets.
US Housing Market Trends
With the exception of the housing bubble from 2004 to 2008, David M. Dworkin and Bill McBride noted in a paper for the National Housing Conference that home affordability is at its lowest point since 1989.
However, during the housing bubble, mortgages with teaser interest rates as low as 1% that reset to a level that homeowners could not dependably pay were to blame for the lack of affordability. Homes were also unaffordable in the 1980s due to sky-high interest rates, with 30-year fixed-rate mortgage rates ranging from 9 to over 18%.
According to analysts, the market today is different. Housing supply chain issues since 2020, rising demand since 2020, and apparent underproduction between 2008 and 2020 are all contributing factors, according to a study.
And by the end of the year, little is likely to have changed.
As builders hold off on starting new construction until they know how well the current stock of homes sells, new home construction has stagnated.
Sam Khater, the chief economist at Freddie Mac, said that although the ability of many people to purchase a home will remain difficult, demand from homebuyers will continue to cool and return to a more normal pace of activity.
According to Khater, the housing market has experienced tremendous volatility as a result of the Federal Reserve’s intervention to assist in the control of inflation. “Home prices remain high in comparison to homebuyer wages, even though house price appreciation will increase at a more modest rate. When these variables are considered collectively, the housing market is slowing down and challenges with affordability are exacerbated.
Conclusion
The US Housing Market has been steadily increasing in recent years, but it has seen a decline in the last few months. Some analysts predict that although home prices may rise, options will also increase.
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