Homes are 55% higher than they were a year ago due to higher mortgage rates

The booming housing market has contributed significantly to the US economic return from COVID-19, but today the market faces a cloud of uncertainty, according to the Chief Economist of the National Association of Real Estate Agents. ..

“Housing has lifted the economy as home prices have risen and buyers’ demand has intensified,” Lawrence Yun told realtors and industry experts during the association.2022 National Association of Realtors Legislative Assembly on Wednesday.

“But this year, we’ve already thrown some curve balls, including record low inventory and solid inflation.”

Builders are competing to meet demand, but supply is picking up, but other factors such as inflation, the war between Russia and Ukraine and soaring fuel prices continue to strain the market. He said.

The most direct impact on homebuyers this spring was a surge in mortgage rates as the Federal Reserve sought to curb inflation.

As part of a promise of stubborn positive action Record high US inflation, The Federal Reserve boosted its benchmark lending rate by 0.5% on Wednesday.. This is the largest incremental jump in 22 years.

Mortgage rates today: on Wednesday, Freddie Mac The average interest rate on fixed-rate mortgages for 30 years is 5.27%, which is reported to be the highest in more than 10 years.

“Current mortgages are spending more money on homebuyers than they were just a few months ago,” Yun said. “For an average-priced home, the price difference is $ 300 to $ 400 a month, which is a huge expense for a working family.”

cost: Home purchases are 55% higher than they were a year ago. National Real Estate Agents Association Calculations..

Rising mortgage rates and prices continue to weigh on affordable prices. While wages were improving, Yun said they were “cleaned up” because of inflation.

“Wages have risen 6% from a year ago, which is good news,” Yun said. “But Inflation rate is 8.5%.. “

What’s next? Inflation will continue to rise in the coming months, and the housing market is expected to tighten monetary policy through a series of rate hikes, Yun said.

As a result, Yun predicted that rising interest rates would slow down the housing market due to a five-month decline in home sales and a decline in new single-family homes.

Big picture: For this spring, national housing experts and economists will be in the country The hot housing market is showing signs of chilling Inflation and the Fed’s rate hikes continue to increase pressure.

Experts are especially in western cities, especially Boise, Idaho, what they consider to be the most “overrated” housing market.. Moody’s Analytics Chief Economist recently predicted overrated cities like Boise. Prices can drop by up to 10% as the market cools.

The three cities of Utah also rank in the top 10 overrated markets in the United States, after Boise. They include Ogden with a premium of 63% or higher. Provo, premium over 54%. And Salt Lake City, with a premium of 53.8%, Florida Atlantic UniversityResearch.

Is there a bubble? Federal Reserve researchers say U.S. home prices are “Freed from fundamentals”, but they say it’s not like a bubble This preceded the 2007 and 2008 market crashes and the global financial crisis.

Prices are at record highs, but experts haven’t seen the same level of speculation that contributed to the Great Recession. Demand today is real, especially in fast-growing states like Utah, which was already facing housing shortages long before the pandemic drastically changed the national housing market.

Here in Utah, local experts say Rising mortgage rates will only delay the rise in home prices and will not stop... Homes are 55% higher than they were a year ago due to higher mortgage rates

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