These days, everyone has questions about the housing market. Conditions changed rapidly earlier in the year and potential home buyers and sellers are wondering what's next. Well, according to one recent analysis from Fannie Mae, lower prices are likely. Fannie Mae's most recent Home Price Index found home prices slowed during the third quarter of this year, with quarter-over-quarter numbers showing a 0.2 percent increase.
Doug Duncan, Fannie Mae's senior vice president and chief economist, says he expects more of the same in the weeks ahead. “Year-over-year home price growth decelerated in the third quarter, as the sharp rise in mortgage rates – and declining housing affordability – appears to have weighed further on demand,” Duncan said. “In addition to the greater affordability constraints for potential home buyers, many existing homeowners likely feel 'locked-in' to their existing, lower interest-rate mortgages. This contributes to fewer homes being listed, as well as fewer potential buyers, and may lead to a growing share of listings have to cut prices to meet the reduced demand … We expect these trends to continue in the coming months.”
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