If you thought the housing market was bad enough: Buckle up.
Mortgage rates are still nearly 7% and home prices are 55% higher than they were at the beginning of 2020, according to the Case-Shiller U.S. National Home Price Index.
Housing inventory is slightly rising overall, but it’s not doing so by nearly enough, a May report by the National Association of Realtors and Realtor.com shows. And an analyst note published this week by Oxford Economics said the housing market will continue to deteriorate this year.
“The supply of existing homes for sale is approaching pre-pandemic levels as a combination of high prices, elevated mortgage rates, and concerns over the labor market keep buyers sidelined,” Oxford Economics analyst Matthew Martin wrote in a note titled “Recession Monitor: Real Test for Economy Is Just Beginning.” “The new-home market is also being challenged, with builders continuing to offer incentives including price cuts in an effort to move unsold inventory.”
Oxford Economics researchers also noted sellers will have less ability to pass along price increases. In other words, sellers will keep pulling their homes off the market if they can’t get a sale price they think they deserve.
