If you have been house hunting over the past few years, then there is no doubt that you have likely experienced some frustration. Whether it is the lack of inventory of homes for sale or losing out to other buyers in bidding wars, it has been quite a challenging market for home buyers. With this said, could the tide be turning to a buyer’s market?
As the Federal Reserve continues to increase rates in an effort to ease inflation, we are seeing mortgage rates rise rapidly. In fact, mortgage rates are now approaching 7%. With this said, while home prices are slowly coming back down, we are still seeing lower inventories as compared to pre-pandemic levels. Nonetheless, according to a recent survey, 44% of economists polled believe that the market will shift to a buyer’s market by the end of 2023. In fact, 12% of economists believe that this transition will occur by the end of 2022. Another 45% of economists believe that it will take a little more time for this transition with a buyer’s market occurring by the end of 2024. Interestingly, all economists surveyed believe that home price deceleration will occur in 2023. Of course, we are already seeing this occur in some markets across the country.
According to a National Association of Realtors® report, the median price of an existing home in the U.S. was $389,500 in August, down from $403,800 the previous month. It is largely expected that this softening of home prices will remain in the months to come. Perhaps the biggest factor will be how far the interest rate hikes will go as the battle against inflation continues.
In closing, the consensus from the economists that participated in this survey were as follows:
- Metros in the South and Midwest are the least likely to see price declines over the next year.
- Vacation market areas are most likely to see price declines.
- Rent growth and inflation should outpace stocks and home price appreciation over the next year.
Although home prices are expected to soften across the country, the demand for South Florida real estate should remain strong. In particular, rental property demand should remain particularly strong as more Americans relocate to the area. Are you ready buy a property in South Florida? Contact Natasha at Live South Florida Realty, Inc. today! In addition, be sure to download the free Florida Home Search app to have real-time access to the South Florida MLS right on your smartphone!