A correction doesn’t seem likely this year, but things could improve in 2024 if mortgage rates settle around 5%, says economist Matthew Gardner.
During the five years leading up to the pandemic, U.S. home prices were rising at an average rate of 5.5% per year. However, as we all know, Covid-19 led the Federal Reserve to start on a massive treasury and mortgage-backed securities buying spree, which ultimately caused mortgage rates to plunge and home prices to soar.
In early 2022, however, the music stopped when Fed Chair Powell announced an end to this buying spree, and mortgage rates quickly began to rise. Starting in June of that same year, prices responded and began to fall with a peak-to-trough decline of over 12.5%.
Naturally, economists and other prognosticators started to offer their thoughts on where the market would be headed in 2023 and, unsurprisingly, there was very little consensus.
A price correction isn’t likely this year/DETAILS
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