Is Real Estate Slowing Down?
Housing experts such as the National Association of REALTORS’ (NAR) Chief Economist Lawrence Yun believe that housing demand will continue throughout 2022 and that prices will rise between 4 and 6%. But certain factors could temper the pace of sales by approximately 3%, and that double-digit price increases, multiple offers, and offers over list price won’t be quite as prevalent as they were in 2021.
Does this mean we’re in a housing bubble? Will there be a real estate crash? Or, is homebuying simply slowing down? For the answers, we need to look at economic growth. Among the many factors that are impacting the economy and therefore the housing market, are inflation, rising mortgage interest rates, overall housing affordability, the labor market, COVID and its variants, and the uncertainty created by the Russian invasion of Ukraine.
Inflation. According to Sam Khater, chief economist and head of Freddie Mac’s Economic and Housing Research division, inflation poses a risk to economic growth. In its January 2022 quarterly forecast, Freddie Mac reported that consumer price inflation (CPI) surged in 2021, hitting a 40-year high of 7.0% year-over-year in December 2021. Khater told Fox News that inflation is broadening beyond supply-constrained segments and is impacting consumer sentiment. Consumers will curtail spending to keep household costs under control. For more article – Click Here