Everyone who's even considering the possibility of buying a home in the near future has been asking the same question over and over again: "Are home prices going to go down anytime soon?"
Well, the market has answered, and that answer is: "No."
Mortgage rates are sinking as markets contend with the ramifications of Russia's attack on Ukraine, and that means home prices are likely to continue surging.
The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Friday, when it hit 4.18%, according to Mortgage News Daily. It is headed below 4% Tuesday.
This will give homebuyers more purchasing power as the historically busy spring season kicks off. It will also keep record high home prices continuing on their run higher. Prices in January were 19.1% higher year-over-year, according to a report released Tuesday by CoreLogic. That level of growth is the highest in 45 years, when CoreLogic began tracking prices.
The specific issue here, of course, is that lower mortgage prices draw more buyers into the market, which means there will be more people chasing after already-depleted housing stock, driving prices even further than they already are.
Prices will go down either when rates go up enough (which will reduce the number of potential buyers) or housing stock increases (which will ease competition for scarce housing). Neither of those is in sight right now, which means house prices just keep going up, up, up.
