U.S. Home Prices Take a Dip. Is the Beginning of a Year-Long Tumble?
Analysts everywhere are raising the red flag: the U.S. home market is set for a tumble, and U.S. home prices are the next domino to fall.
A reset for the market shouldn’t come as a surprise to industry professionals. The U.S. home market has been on the decline for months now as high interest rates have dissuaded new homebuyers, with existing-home sales falling for their ninth straight month in October with a 5.9% cut. What is sparking debate is just how much of a collapse in U.S. home prices is on the radar. Goldman Sachs cut its home prices outlook from flat to down 4%; trusted global capital finance company Fitch Ratings predict U.S. home prices will fall by 5% next year; Reuters’ surveyed analysts predict a fall in U.S. home prices will continue through next year. Overall, local home prices have fallen nationwide off their 2022 peak prices, with home prices in California falling anywhere from 7% to 13%.
Though a drop in U.S. home prices might spell bad news for homeowners and realtors, is it necessarily catastrophic news for the industry? Is this a correction more than a collapse? G.P. Theriot, mortgage loan officer, luxury mortgage expert at Origin Bank and VA mortgage expert at Theriot Mortgage Group, thinks the drama surrounding the U.S. home prices dip is a bit overblown. Here’re Theriot’s takeaways.
“Are home sell prices dramatically going down? I love that word, ‘dramatically,’ because it’s just putting the fear in everyone. Here’s what I can tell you. Home prices, they’re adjusting to back to the norm of a real estate market. We saw some crazy sell prices over the past year, but with these prices adjusting, and I’ll tell you, they might be adjusting to the back to the normal, but we’re still seeing multiple offers with this adjustment.
So even with sellers in panic mode, if you’re thinking about selling, it’s still a great time to sell because these buyers are starting to get off the fence too and start to make offers. We’re starting to see more multiple offers because, guess what? Interest rates are starting to go down, and two, buyers are realizing this is the time to buy right now. So many people have been sitting on the sideline. I can tell you this, rates are gonna come down, and when they do come down, the floodgates are gonna open. So, if you’re thinking about buying, now is the time to get in the game.
And even if you’re thinking about selling, you’re still gonna come out ahead. So do not panic. The sky’s not falling. It’s not dramatically coming down. It’s just shifting, adjusting to a normal real estate market.”
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