It will cool, no question, but unlike the great housing crash a decade ago, mortgage underwriting is very strict now, so most homeowners can afford the homes they're currently in. So will the housing market crash? Unlikely. As the economy opens and more Americans are vaccinated, cities could see a rebirth, taking some of the heat out of all that suburban competition. Homebuilders are slowly increasing production, and new government Covid stimulus could add to that. "With higher interest rates and a continuing shortage of inventory, it will be important to keep a careful eye on both home prices and affordability metrics in the coming months." "Any hopes of 2021 bringing an influx of homes to the market and lessening pressure on prices appear to be dashed for now," wrote Ben Graboske, president of data and analytics at Black Knight, noting the drop in new for-sale listings in January and February. Spokane, Washington (+20%) Ogden, Utah (+20%) and Phoenix (+18%) follow.Ĭities with the slowest home price appreciation are Chicago, Houston, New Orleans, Orlando, Florida, and Pittsburgh, all with single-digit gains. Those include Boise City, Idaho, where prices are up 26% annually, according to Black Knight. Many of those are in the West, where Californians have flocked during the recent exodus. Markets with the strongest price appreciation could be most at risk. housing markets saw annual home price growth of 10% or higher, according to Black Knight. "That does mean there will be some markets that are not going to have any price growth at all," said Nothaft, adding, "I do think we're likely to see some markets correct." If these trends continue, she said, it could mean that we are "not in the midst of runaway home price speculation or a housing bubble."Īs mortgage rates rise, which they are slowly doing now, and buyers hit an affordability wall, Nothaft said he expects to see annual home price gains nationally cool to the 3% range. "Sellers' asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern."įairweather sees the decline in mortgage purchase applications as a sign that some people are dropping out of the market because there's a lack of affordable homes for sale. "The housing market is more competitive than we've ever seen it, but a couple indicators are causing us to ask whether we're nearing a peak in terms of how fast demand and prices can grow," said Daryl Fairweather, Redfin's chief economist.
This was 16 percentage points higher than the same period a year earlier. "That's the mindset that comes in, because that means it's an auction market."Īt the start of this month, 42% of homes were selling for more than their list price, according to real estate brokerage Redfin. "I have to admit I'm worried when I hear that. That Google question about overpaying doesn't sit well with Nothaft. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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