Home prices continue to rise, defying high mortgage rates and making homeownership increasingly unaffordable since the 1980s

A housing expert predicts that prolonged national home price declines could occur for the first time in over a decade due to factors such as increased supply and economic uncertainties.

Despite predictions of home price declines since the pandemic began, prices have held up, with over 80% of US metropolitan areas experiencing price gains in the third quarter.

Moody’s Analytics housing economist expects prices to slump in the second half of next year, estimating a 3-4% decline in 2024’s fourth quarter.

The supply and demand dynamics driving this year’s home price gains are abnormal, and changing conditions could reverse the market.

Affordability is a major concern, with buyers needing to allocate over 40% of their income to mortgage payments, the highest percentage since 1984.

Mortgage rates, influenced by the 10-year Treasury yield, remain uncertain and could impact demand in the future.