(RepublicanJournal.org) – Prospective home buyers might be in for more bad news. A new report from Redfin shows house prices remain steady, with the average costing 2.1% more this year than last. The resulting mortgage rates have left many renters feeling little hope of seizing their tiny piece of the American Dream anytime soon.
Biden’s economy has forced many US citizens to tighten their belts and put off larger purchases. JP Morgan notes that inflation has been slowing, but it’s still high in many areas and might not completely level out until the latter part of 2024. Thirty-year fixed mortgage rates have remained between 6.5% and 7% since November 2022, with home values hovering near all-time highs. Average monthly payments have hit a new record at $2,656.
Redfin’s report shows the average home sale between mid-June through mid-July was $382,500 — which means the same home cost about $8,032.50 more at closing than it would have the previous year. Low vacancy appears to be a major contributing factor, with the effects of supply and demand resulting in heavy bidding wars despite skyrocketing annual percentage rates. Existing homeowners, many of whom were able to lock in lower interest rates before the spikes, are hesitant to gamble with their current mortgages, taking new listings down by 25%. Overall, the number of houses on the market is down by 16%, the lowest it’s been in a year and a half.
Economic experts foresee a slow recovery, and the problem could get worse before it improves. Entrepreneur and real estate investor Barbara Corcoran, who is also a featured player on “Shark Tank,” told Yahoo! she predicts home prices will spike again — by as much as 20% — once interest rates start to fall.
A ray of hope does still exist. Business Insider found that new home construction is on the rise, which could both improve mortgage rates and stabilize rental prices even sooner than predicted.
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