US home prices to sink by 2023 as mortgage rates hit 6%: analyst
By: New York Post
Sky-high prices in the US housing market will sink in the coming months as cash-strapped prospective homebuyers contend with surging mortgage rates, a prominent research firm said in a report Monday.
Home prices are projected to decline approximately 5% by the middle of 2023, according to the latest projections released by Capital Economics. Property values were previously expected to remain unchanged over that same period.
The firm revised its outlook for home prices in response to the recent uptick in mortgage rates. The 30-year fixed loan mortgage rate hit 6.03% on Monday, according to data from Mortgage News Daily. The same mortgage rate hovered below 3.5% as recently as January.
“That deterioration in affordability will shut many potential buyers out of the market,” Pointon wrote in the report, according to Bloomberg. “That will reduce the competition for homes, and sellers will eventually see the need to accept a lower price for their property.”