Mortgage rates are beginning to flatten after sharply rising over the last several months, and as a housing boom gives way to a housing correction, most forecasters are anticipating price deceleration in the nation’s hottest real estate markets. Rick Palacios Jr., head of research at John Burns Real Estate Consulting, expects home prices to drop by mid-single digit percentages over the next two years, and other market experts like Capital Economics’ Matthew Pointon agree.
While home prices will likely post only small declines nationally, popular destinations like Boise, Austin, and Las Vegas could see much more significant deceleration, MarketWatch reports. In Provo, Utah, nearly half of all homes for sale experienced price drops in May, while 46% of homes in Salt Lake and 44.2% of for-sale homes in Boise also had their prices reduced.
Inventory is climbing, too. Realtor.com data from June noted a 18.7% increase in the number of new homes available for buyers — the “fastest yearly pace of all time,” the company said. The biggest jumps in listings were in markets like Raleigh and Charlotte in North Carolina and Nashville on a month-over-month basis.
“The U.S. housing market is at the beginning stages of the most significant contraction in activity since 2006,” Len Kiefer, deputy chief economist at Freddie Mac, said earlier this month.
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