Monday, July 17, 2023

Where are housing prices headed?

 

From CalculatedRisk.com:

Inventory is pushing up prices, and affordability (the change in monthly payments) is pushing down prices. And it appears this battle will continue … there is no relief in sight for inventory or for mortgage rates.
...
First, we can be very confident - barring another crisis - that we will not see a large wave of distressed sales and cascading declines in nominal house prices. Lending has been reasonably solid over the last decade, and most homeowners have substantial equity in their homes.
From Chapter 8: In the short run supply of houses ("inventory") is low, but so is demand (due to high interest rates) so we don't know which way price will go. 

From Chatpers 9, 11: Over the longer run, home owners have enough equity in their houses that they will be able to refinance without selling so supply is not going to flood the market as it did in 2009 when a big housing bubble popped. 

And over the longer run

When the baby-boom generation starts moving to retirement homes or warmer climates, inventory will likely increase. But that is mostly a 2030s story, see 

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