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Buckle up, brokers: This could be the worst spring for home sales in years
Rising prices and interest rates, along with the new tax law, could slow demand
Springtime for home sales across the U.S. could end up being a pretty depressing season.
Increasing mortgage rates, a new tax law reducing homeownership incentives and exhaustion from first-time homebuyers getting priced out of the market could all contribute to extremely low demand for houses this spring, according to the Wall Street Journal. The volatility of the stock market is also contributing to weakness at the high end of the housing market, while rising interest rates are a major factor on the low end.
This could lead to a slowdown in the constant price increases that the housing market has seen in recent years, but while this may increase interest from buyers, it could make things more difficult for sellers in pricier markets.
Last year, about 2 million homes were sold between March and June, and the National Association of Realtors expects this spring’s sales to be flat. Fannie Mae data from February showed that consumer confidence had dropped in the housing market, and in January, NAR data showed that home sales saw their sharpest drop in three years.
“People are being a little more cautious than they were before,” Chicago broker Bruce Glazer told the Journal. “Buyers have a number in mind, and they’re willing to stick their ground more than in the past.” [WSJ] – Eddie Small