“Mortgage rates will not go back to 3% – we’ll be lucky if we get back to 5,” per NAR chief economist Lawrence Yun.
Zillow, on the other hand, has taken a different stance. After initially forecasting that U.S. home prices had reached their lowest point in February, Zillow economists raised their home price predictions every month until August. At that point, they anticipated a 6.5% increase in home prices over the next 12 months. However, last month, they revised their outlook downward, and they have done so again this month.
Zillow's current prediction is that home prices will increase by 2.1% between September 2023 and September 2024. This is a notable shift from their forecast just last month, which projected a 4.9% increase in home prices between August 2023 and August 2024.
According to Zillow economists, this revision is due to a rare month-over-month dip in home values in September, combined with the continuous rise in mortgage rates. They acknowledge that the resilient labor market is likely to result in an extended period of elevated interest rates, which has contributed to a slowdown in the housing market. Elevated mortgage rates have dissuaded new listings, as homeowners with favorable rates have opted to keep their current homes due to the relatively lower monthly payments they offer.
Read more: https://unusualwhales.com/news/morgan-stanley-reverses-course-on-the-housing-market-seeing-a-lot-more-pain-ahead-for-homebuyers
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