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.