US: House Prices may fall in both 2023 and 2024

Breaking news in the US real estate market – house prices may fall in both 2023 and 2024.

Breaking news in the US real estate market – house prices may fall in both 2023 and 2024. This update comes after an initial surge in home prices that took place during the height of the pandemic. Since then, home prices have fallen 12% to an average of $363,000 in February, down from $413,800 in June 2020. This can be attributed to the rise in mortgage rates since March last year. According to Freddie Mac, the 30-year fixed mortgage rate in the US stood at 6.32% for the week ending Thursday, up from 4.67% a year earlier.

This drop in home prices is expected as Moody's investor services division predicts a decline in the market that won't recover anytime soon. The rise in unemployment and the projected recession later this year puts additional pressure on home sales and prices. San Francisco, Seattle, Denver, Las Vegas, Phoenix, San Diego, Portland and Austin have already been experiencing a steep decline in house prices for quite some time. However, some markets in Florida and Southeast states have witnessed an increase.

The analysts predict a consistent drop in home prices across the US, about 4% in both 2023 and 2024. This decline may fluctuate across markets and segments, but it will happen over the course of the years. They also predict that new home sales may fall by around 20% this year due to the rising home prices and mortgage rates, which are likely to affect demand for housing for a few years to come. According to real estate brokerage Redfin, only 21% of homes for sale last year fit within the budget of a typical American household. This means that the monthly mortgage payment on the home should represent no more than 30% of the buyer's income.

The real estate market in the US is currently facing a challenging time as house prices continue to fall. The drop may be significant, and it is expected to happen over the next two years. The good news is that the market is expected to stabilize by 2025, and house prices are expected to rise once again. Despite the current situation, analysts advise potential home buyers to be careful and choose wisely. They should only purchase a home that they can afford and avoid taking on significant debts that may cause them financial distress in the future.