Home Prices are Stabilizing. Will it Last?

Home sale prices and rents are starting to stabilize in markets around the country, prompting both concerns about a potential recession and optimism about lower housing costs. 

According to an article by Jared Brey in Governing, “Prices still aren’t dropping in most places, but they’ve begun growing more slowly. Mortgage rates, which have been holding steady at a relatively high 6.5-7.5 percent over the last few years, have recently dropped to closer to 6 percent. Rents even fell slightly in a few big cities that saw a spike in apartment construction in recent years.”

Experts believe that prices will remain high in the short term due to high construction costs, a limited supply, high interest rates, and competition from corporate buyers. However, an anticipated record low rate of household formation and lower birth rates could lead to lower housing costs in the long term.