Ask almost any real estate agent, and they will tell you that the housing market is slowing down. Some real estate experts call it a correction or say that the market is transitioning. Freddie Mac says that the U.S. housing market is slowing down, whatever you name it.
The reasons for the contraction are tow fold. First, home prices increased rapidly over the past two years, up 37%. Second, the interest rate has increased from 3.2% to 5.88% in the last six months.
Will home prices decline in the near future?
The answer may depend on where the home is located. Experts predict overall home prices in the U.S. will rise 5.9% from April 2022 to April 2023. The reason lies in the number of millennials that want to buy homes.
Certain regions of the country may, however, experience price declines. For example, experts feel that it is more likely that prices will decline in the Boston-Cambridge, Massachusetts area, than in the Miami-Fort Lauderdale-Pompano Beach, Florida area, or even in the Cape Cod, Massachusetts area. Unemployment, debt-to-income ratios, consumer confidence, and income growth are all factors that can affect the desire and ability to purchase homes in a given area.
Suppose the inflation rate continues to rise and consumer confidence weakens. In that case, the probability of home price declines will increase in the coming months. CoreLogic has published data for various areas of the United States.
To see what the predictions are for multiple areas of the county, look at this Fortune.com article – https://fortune.com/2022/06/23/housing-markets-labeled-high-risk-of-a-home-price-drop-just-spiked-housing-chart/?queryly=related_article>