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The rate at which\u00a0home prices\u00a0grow is slowing down.<\/p>\n
U.S.\u00a0home prices\u00a0increased 0.6% from a month before in February, in line with the 0.6% average monthly gain in the roughly eight years leading up to the Covid-19 pandemic, according to a\u00a0new\u00a0Redfin analysis.<\/p>\n
Before the pandemic, it was normal for prices to grow about half a percent every month, or to increase around 5% or 6% annually, said Daryl Fairweather, the chief economist at Redfin.<\/p>\n
\u201cWe\u2019re back to that trend, despite these higher mortgage rates,\u201d she said.<\/p>\n
\u201cHome prices are appreciating at the same pace as before,\u201d he said. \u201cIt\u2019s returned to the trend that we saw pre-pandemic.\u201d<\/p>\n
However, the market today is vastly different from the market two to eight years ago, experts say. The average home is still\u00a0unaffordable\u00a0for most potential buyers while inventory has slightly improved but not enough to meet demand.<\/p>\n
\u201cThe sentiment we\u2019re getting from our agents is that neither sellers nor buyers are satisfied with this market,\u201d Fairweather said. \u201cSellers are dissatisfied … with offers that they\u2019re getting. And buyers are disappointed in rising prices and rising mortgage rates.\u201d<\/p>\n
Levels of transactions are at \u2018recessionary lows\u2019\u00a0<\/p>\n
While the housing market has stabilized in terms of price growth, a major difference between the market today and the pre-pandemic period is the relatively low number of transactions, which is largely due to high mortgage rates, said Fairweather.\u00a0Mortgage rates peaked at nearly 8% last year,\u00a0but are still over 6%, according to Freddie Mac data.<\/p>\n
In fact, the level of transactions are at \u201crecessionary lows\u201d despite \u201ca pop in the data in February,\u201d Walsh said.<\/p>\n
Another factor affecting sales is the extremely limited supply of homes, he added.<\/p>\n
New\u00a0listings\u00a0climbed 5% during the last four weeks ended March 17, the biggest year-over-year jump since May 2023, Redfin\u00a0found. But \u201cit\u2019s like a small recovery from a rock bottom,\u201d said Fairweather.<\/p>\n
\u201cWe\u2019re not back to where we were pre-pandemic,\u201d she said.<\/p>\n
Supply growth is mostly tied to a\u00a0seasonal trend, economists say. Owners often list their homes for sale in February because they prefer to move in the spring and summertime, Walsh said.<\/p>\n
And sometimes, life happens. \u201cAnother factor is just people needing to move for either a new job or they\u2019re getting married, or there\u2019s some other big life event,\u201d Fairweather said.<\/p>\n
The rate lock-in effect is loosening its grip<\/p>\n
The mortgage rate lock-in effect,\u00a0also known as the golden handcuff effect, kept homeowners with extremely low mortgage rates from listing their homes last year: They didn\u2019t want to finance a new home at a much higher interest rate. Now, that is loosening its grip on the market and slightly boosting available supply, economists say.<\/p>\n
\u201cIt was definitely keeping people in place, but the more time that passes, the less strong that effect becomes,\u201d Fairweather said.<\/p>\n
Some buyers who had put off listing their homes \u201care coming to terms with higher mortgage rates,\u201d because they feel they can no longer postpone the move, Walsh explained.<\/p>\n
While the rate lock-in effect is still playing a role in today\u2019s low inventory, it will fade further over time, especially as the Federal Reserve decides to cut rates later this year, Fairweather said.<\/p>\n
Mortgage rates\u00a0are also forecast to modestly decline this year as the\u00a0Fed trims interest rates, while home prices are likely to remain flat or unchanged nationally, Walsh said.<\/p>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":"
[ad_1] The rate at which\u00a0home prices\u00a0grow is slowing down. U.S.\u00a0home prices\u00a0increased 0.6% from a month before in February, in line with the 0.6% average monthly gain in the roughly eight years leading up to the Covid-19 pandemic, according to a\u00a0new\u00a0Redfin analysis. Before the pandemic, it was normal for prices to grow about half a percent …<\/p>\n","protected":false},"author":1,"featured_media":33390,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/33388"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=33388"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/33388\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/33390"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=33388"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=33388"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=33388"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}