YOUNGSTOWN, Ohio (WKBN) – Economists are expecting the winter housing market to be rough. Winter is historically a slow time for sales, but the current market will make it more difficult.
According to Bankrate.com, home prices and mortgage rates are expected to remain high and inventory will continue to be a challenge.
Existing home sales declined in September by about 2% and 15.4% from a year ago, according to the National Association of Realtors, but three regions showed increases in contract signings including the Midwest, which had the biggest gain in contracts at 4.1%.
Mortgage rates are teetering in the 7.5% range right now, and that is expected to keep buyers on the fence, with many waiting for rates to drop in the spring. Rates were forecasted to fall closing out in 2023, but it doesn’t look like that is going to happen.
According to Fannie Mae, mortgage rates will remain high and home price growth will decelerate in 2024 as affordability remains “extremely constrained.”
“Despite consumer resiliency, the recent rise in interest rates has been precipitous, and in past environments – even with less severe interest rate shocks – this has led to economic dislocations. As such, we still expect to see a mild economic downturn in the first half of 2024,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “
Dugan said that while the rate of inflation has slowed, the Federal Reserve has said that rates “will be higher for longer,” but Fannie Mae does not expect additional Fed rate hikes.