![]() ![]() Although prices are unlikely to fall nationwide, there will probably be easier buying opportunities in 2023. When this pandemic eases, and supply begins to catch up with demand, there will be thousands of people who are paying ridiculous prices for houses today, that will be left with huge mortgage payments on a house that is worth a fraction of what they paid. Prospective home buyers should probably chill. At some point, perhaps in a couple of years, this housing 'bubble' will certainly burst. As the 13th season of MTV Cribs aired in 2006, the housing market had already hit the first two criteria and, unknown to the public, was barreling towards the third. Major capital projects must pencil out with sales back at 2019 levels. ![]() Freddie Mac: The firms forecast model has U.S. If they are right and I am wrong, then the housing market will remain strong longer.īusiness leaders in the housing supply chain should enjoy their strong sales this year but not anticipate further growth in the coming years. NAR: The trade group projects that existing home prices are poised to rise 1.2 in 2023 while mortgage rates will average 6.3. They doubt long-term interest rates will rise by a percentage point even out to December 2022. Mortgage rates are likely to rise a full percentage point by mid-2022, though this forecast exceeds the average prediction of my fellow economists. The Fed has also been buying many treasury securities, which are often competitors to mortgages for institutional investors. The Fed has been buying mortgages wholesale, depressing mortgage interest rates. Although the Fed’s traditional tools impact short-term rates, with only small effect on mortgage rates, the new actions by the Fed impact mortgages directly. Mortgage rates are likely to rise when financial markets anticipate more inflation and action by the Federal Reserve to stem inflation. ![]()
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