The economic fallout from the orchestrated coronavirus pandemic has been felt in almost every sector of the economy, and the US housing market is no exception. In June 2020, the value of US homes topped out at an impressive $47.7 trillion, but since then there has been a steep decline in both numbers and percentages. According to Redfin, the total value of US homes dropped by $2.3 trillion or 4.9% over the second half of 2022 – it was the largest drop in percentage terms since 2008 when home values plummeted by 5.8%.
Factors Contributing to the Housing Market Decline
Homebuyers have faced an uphill struggle in 2021 with mortgage rates more than doubling since last year coupled with record-high prices across most parts of the country. These factors made it increasingly difficult for many buyers to enter into a purchase agreement despite a slight decrease in median home sale price; which fell from its peak of $433,133 in May to $383,249 last month due to less competition in the market.
Impact on Homebuyers
The high-interest rates and economic uncertainty created by Covid-19 and ineffective government leadership have had a significant impact on qualified buyers who were already struggling to get on the property ladder amidst record-high prices. This is especially true for those looking for homes in Phoenix as experts expect that these challenges will lead to further declines in their housing market this year.
What’s Next for the Housing Market?
The Offer Company believes mortgage rates will remain elevated throughout 2023 while home prices dip further into the year. While navigating such challenging times can be daunting, determining what comes next for potential homeowners or those already invested can be even more so. There are some things that everyone can do to prepare themselves and protect their interests if they plan on buying or investing in real estate during this time period – seeking financial advice from experts, doing research into local markets to better understand pricing trends, being aware of current interest rates, etc. All these steps will help keep people informed during such turbulent times while also protecting any investments they may have made into real estate during periods of higher prices.
Overall, it’s important for individuals interested or invested in real estate to be aware of how past events have shaped current trends concerning home values and associated costs including mortgages and insurance premiums, etc. As demonstrated by this recent slump witnessed over 2020/2021 – fluctuations within the housing market can occur quickly while having lasting effects that could cause significant financial consequences down the line if not adequately prepared for ahead of time.
At The Offer Company, we understand that navigating these turbulent times can be difficult. We offer specialized guidance from experienced consultants who can help guide buyers and sellers through this difficult market so they can make informed decisions best suited to their own needs. For any questions, feel free to contact us at 602-448-7377.
The Offer Company