Actions from Congress and the Federal Reserve helped to avoid a housing market bust, and housing prices surged instead. However, the Fed’s actions are now pushing up mortgage rates and cooling off the housing market. Moody’s Analytics found that metropolitan home prices are overvalued almost everywhere and are set to decline. However, CoreLogic thinks home prices will rise another 5% over the next 12 months. Note that analysts wrongly predicted that housing prices would drop during the 2020 due to the pandemic.
- Historically, US homes are being over-valued as rarely before. Some areas are slated, per Moody analytics, to see a soon reversal of this golden fortune.
- Mortgage rates are already starting to rise and soften the market, in part due to Federal Reserve pressure.
- Sellers should beware that by next year, the analytical forecast predicts that year over year home price growth will be at zero.
“Both Congress and the Federal Reserve stepped in with unprecedented economic aid, and after just two months of recession the U.S. economy and housing market flipped into high growth.”