The U.S. housing market faces a long recovery from the steep increase in mortgage rates over the past year, which brought an “abrupt end” to the real estate boom in the economy.
That is according to a new forecast from Moody’s Analytics, which projected that property values in the U.S. face a 2.4% decline next year as mortgage rates continue to weigh on the real-estate market.
“While maturing millennial households drive housing demand, the doubling of U.S. mortgage rates is causing notable retreats in certain markets, mainly in western states,” the analysis said.
Mortgage rates spiked over the past year as the Federal Reserve waged an aggressive campaign to crush high inflation, approving 10 rate hikes in the span of 15 months. While the federal funds rate is not what consumers pay directly in mortgage, it affects borrowing costs for home equity lines of credit, auto loans and credit cards.
Even just a minor change in rates can affect how much would-be homebuyers pay each month.
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Source: www.foxbusiness.com
ENB
Sandstone Group
