In the year ahead, the housing market may be slow to start, with home prices, rents, inventory and interest rates not moving much at all, according to economists, analysts and real estate brokers.
At the beginning of the pandemic, office workers were liberated from their commutes but found themselves stuck at home and hungering for space. Many Americans went on a home buying frenzy, fueled by cheap debt and an insatiable urge to move. The result was a run up on home prices at a pace never seen before in U.S. history.
Then the party ended with a thud last spring when mortgage rates doubled in a matter of months. Buyers evaporated from the market, unable to pay the staggering cost of a buying home in this new reality. And those who had planned to dip into their stock portfolios to fund down payments saw their fortunes dwindle as stock prices tumbled. The housing market’s anemic inventory did not recover, partly because sellers stayed put, realizing that they, too, would be at the mercy of high mortgage rates for whatever new home they purchased.
“The pandemic created a perfect storm for driving up housing prices,” said Ruben Gonzalez, the chief economist for Keller Williams, and “2022 was the aftermath of that storm.”
Get ready for one hell of a hangover.
The year ahead may continue to feel like the morning after an epic party: slow to start, with home prices, rents, inventory and interest rates not moving much at all, according to interviews with economists, analysts and real estate and mortgage brokers. Lingering economic uncertainty, including a rocky stock market, could translate to a housing market waiting for something to happen.
The housing market has “basically been in hibernation since late summer,” said Daryl Fairweather, the chief economist for Redfin, which anticipates