Experts are still unsure about the US housing market outlook for the latter half of the year. Glenn Kelman, CEO of Redfin, said on CNBC’s “Money Movers” that they expect improvement in the housing market in the US.
What to Expect from Housing Market in the US
Kelmin added that he believes the economy hit rock bottom in Q1 2024 and expects the housing market in the US to improve going forward.
Other experts are uncertain about the improvement in the US housing market.
Jeff Ostrowski, a business analyst at Bankrate.com, said that it is a very strange market and hard to predict.
What Factors Could Affect the US Housing Market?
The mortgage rate lock-in effect seems to be going down, according to Zillow’s senior economist, Orphe Divounguy. This effect had previously kept homeowners with low mortgage rates from listing their homes to avoid higher rates on new mortgages.
During the week ending June 1, newly listed homes increased by 2.1% from last year, and the available inventory of homes for sale rose by 35.5%, according to Realtor.com.
On CNBC, Kelman said that the demand for homeownership is still high, particularly among long-term prospective buyers.
Doug Duncan, Fannie Mae’s chief economist, says the supply increase isn’t enough to attract buyers despite more listings.
Doug said that the number of listings in the US housing market is increasing as more homeowners feel they cannot delay moving. However, affordability issues will likely slow the conversion of these listings to sales in the US housing market.
The 30-year fixed mortgage rate dropped to 6.99% on June 6 from 7.22% on May 20. Despite this decrease, affordability remains a concern for buyers in the US housing market.
The National Association of Realtors predicts a possible rate cut by fall, says Jessica Lautz, the NAR’s deputy chief economist. According to her, the Fed funds rate might change in late September.
Mortgage rates are expected to decrease to 6.5% in the fourth quarter, but with home prices going up and housing inventory still limited, homebuyers may not feel much relief in the US housing market.
She added that they might end up paying the same mortgage payment because they are buying a home with a lower interest rate but a higher price.
Ostrowski said that though fewer transactions occur, housing prices have remained firm in the US housing market.
Home prices continue to increase, with the median home sale price rising to $392,200, up 4.4% from last year, as reported by Redfin.
Despite recent price declines in some areas, many of them experienced significant price growth during the COVID-19 pandemic. The US housing market witnessed prices increasing by as much as 45%, according to Lautz. As a result, buyers may not experience much relief in affordability despite the recent price drops in the housing market in the US.
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