As rising mortgage rates slow down an already overheated real-estate market, the talk of a housing boom in 2019 seems to be at fever pitch. The past two years have seen home prices rise at an unprecedented rate, prompting many to wonder: Is there a crash or are they just slowing down?
Two things are needed to answer this question. First, we need to understand the real shift taking place in today’s housing market. The second is what experts have to say about the future home price.
The Reality of the Shift in Today’s Housing Market
We are at an inflection point between housing supply and demand. According to realtor.com active listings increased by more than 26% last year while ShowingTime Showing Index showings have fallen almost 17% (see graph below). This is a turning point in housing. We’ve seen an increase in demand for homes (showings) over the last two years and not enough homes for those who want to buy. This caused a market frenzy.
Supply and demand are very different today, and the market is slowing. This is a clear sign of the sudden slowdown many are experiencing.
The Reality of the Shift in Today’s Housing Market
We are at an inflection point between housing supply and demand. According to realtor.com active listings increased by more than 26% last year while ShowingTime Showing Index showings have fallen almost 17% (see graph below). This is a turning point in housing. We’ve seen an increase in demand for homes (showings) over the last two years and not enough homes for those who want to buy. This caused a market frenzy.
Supply and demand are very different today, and the market is slowing. This is a clear sign of the sudden slowdown many are experiencing.
What Experts Are Saying About Home Prices in the Coming Year
Experts are currently forecasting that home prices will rise by 2.5% in 2023. However, this is slower than the previous two years. According to the average forecaster, national home prices will increase by 2.5% over the next year. Only one of the six forecasters is calling for home prices to decline.
We can see that the market for national real estate is changing and what experts are saying is consistent with this conclusion. However, it is not a bubble about to burst. While this doesn’t mean that only a few markets will experience home price declines, there’s no reason to believe the national housing bubble is imminent.
Bottom Line
Many are worried that the real estate market is in decline and we may be living in a housing bubble. The housing market has seen unprecedented levels of demand over the last two years, with constrained supply. This resulted in homes increasing in value at an unprecedented rate. Experts predict that the national real estate market will increase in the next year, despite some price declines in overheated markets.