Ever since the whiplash-inducing, bust-and-boom cycle of the U.S. housing market kicked into high gear with last decade’s devastating crash and thisdecade’s ever-escalating home prices, bidding wars, and inventory shortages, one question has been top of mind for buyers and sellers alike: Is this “party” ending anytime soon? Lately, those who read economic tea leaves have been hinting that we may be heading toward a significant correction in the go-go-go American housing market. Surely national home price increases have to slow down eventually, right?
It turns out they may be on to something.
“The signs are pointing to a market that’s shifting toward buyers,” says Danielle Hale, chief economist of realtor.com®. “But in most places, we’re still a long way from a full reversal.”
“National headlines continue to dominate the news. The news, though, is a little different here in Arizona. Move-up demand has flattened and is expected to continue to do so as mortgage interest rates climb; fewer buyers that have 30-year mortgages presently are not going to change homes at a both a higher price with a higher mortgage interest rate. Entry-level demand, though, has continued to climb- so-much-so that total new home sales have grown at double-digit rates during every 30-day period compared with the same period in the prior year for 14 consecutive months. This growth has occurred despite a drop-off in active communities from which buyers have had to choose from. Resale demand is crimped by a lack of supply.”