Without a crystal ball, it's impossible to predict what home prices will look like a few months down the line. And an uptick in inventory is what's needed to bring home prices down. However, if things remain relatively stable on the pandemic front, we could see more sellers start to list their homes. After all, most people don't want more upheaval at a time when there's a broad health crisis brewing. And if that situation worsens, it may lead sellers to hold off on listing their homes. Right now, COVID-19 cases are up in many parts of the country. Yet somehow, just when we think things are settling down, a new variant emerges to wreak havoc. That's because there will be more supply to go around, and so buyers won't need to continuously engage in bidding wars, which are notorious for driving home prices upward.Īmericans have been grappling with the pandemic for well over two years now. And when more housing inventory hits the market, home prices should start to come down. If mortgage rates continue to rise, it could spook sellers into listing their homes sooner rather than later. By making borrowing more expensive, the logic is that consumers should start to spend less, thereby narrowing the gap between supply and demand that's currently driving prices up. That's because the Federal Reserve is moving forward with interest rate hikes in an effort to cool inflation. There's a good chance that mortgage rates will continue to rise this year. But for that to happen, these things would also need to happen. And to be clear, that's a distinct possibility. In fact, some buyers may be at a point where they're ready to pull out of the market for the summer and hope that things cool down during the fall. And so now, not only do buyers have to take out larger mortgages, but they also have to pay more interest on the sums they borrow. That represents a 14.8% increase from a year prior.Ĭompounding the issue is the fact that mortgage rates are now sitting at much higher levels than they were a year ago. In May, the median home sale price reached $407,600, according to the National Association of Realtors. Home prices are way up on a national level, and they don't appear to be coming down anytime soon.
There's a reason so many would-be buyers are struggling to purchase a home these days. Check out The Ascent's picks for the best mortgage lenders