Doctors making $350,000 are struggling to find long island homes
Doctors making $350,000 are struggling to find long island homes, per Bloomberg.
The housing market is poised to grapple with persistent challenges this spring and beyond, including high mortgage rates, soaring home prices, and a shortage of housing inventory, according to experts.
Doug Duncan, senior vice president and chief economist at Fannie Mae, expects the housing market to face affordability challenges due to high home prices and rising interest rates in 2024. He believes that strong economic data, including higher inflation and robust job numbers, will push mortgage rates higher than previously anticipated.
Despite these hurdles, Fannie Mae predicts an increase in home sales compared to last year. Experts also anticipate a slower growth in home prices this year, although price trends will vary regionally and depend on local market conditions.
While U.S. home prices declined for the third consecutive month in January due to high borrowing costs, the year-over-year increase was 6%, the fastest annual rate since 2022, according to the S&P CoreLogic Case-Shiller Home Price Index.
Mark Fleming, chief economist at First American Financial Corporation, foresees a "flat stretch" in the housing market ahead, suggesting that 2024 will not be the year of a complete recovery but rather a period of stabilization.
For the housing market to recover, experts suggest that inventory of homes for sale needs to increase significantly to ease price pressures. They also highlight the importance of mortgage rates cooling off, which is expected to happen gradually despite a recent uptick. Mortgage rates stood at 6.88% for the week ending April 11, according to Freddie Mac.
Keith Gumbinger, vice president at HSH.com, warns against a rapid decline in mortgage rates, as this could lead to a surge in demand that offsets any inventory gains, causing prices to rise again. He believes that a gradual reduction in rates, bringing them back to the upper 4% to lower 5% range, would help the housing market return to pre-pandemic levels.
Kuba Jewgieniew, CEO of Realty ONE Group, remains optimistic about a housing market recovery in 2024, especially as interest rates settle around 6% or lower.