Housing Market Cooling After Years of Price Increases
By Economists have been forecasting for a while now that the housing market will eventually slow down, as home prices suffer from the results of their own success. Home prices rose sharply for years and, while the heated market has cooled down, it’s not likely to experience an equally sharp drop soon. According to Greg McBride, CFA, Bankrate's Chief Financial Analyst, a steadying of prices is likely more probable than a deep decline.[0] Capital Economics' senior property economist, Matthew Pointon, anticipates a deceleration instead of a plunge, forecasting a 5 percent dip by mid-2023.[0]
Savills' Director of Research, Lawrence Bowles, predicts that “average values to rise by a total of 7.5% in 2022, as affordability pressures are expected to substantially moderate further price growth for the remainder of this year.”[1]
Average house prices have grown by 10.4% on an annual basis up until March 2022, the highest rate seen in almost eight years, due to the recent upward shift. Research showed a 16.8% average increase in house prices between 2020 and the first quarter of 2022, compared to a 2.7% average growth in income.
For the past 7 months, house prices have consistently gone up each month, with the most recent increase being a 1.7% rise.[1] According to Nationwide, house prices are rising at their quickest pace since June of the previous year. In August 2021, the Nationwide House Price Index reported that year-on-year house price growth had increased to 11%, with the median property worth £248,857. It was reported by Nationwide that house prices have increased by around 13% since the onset of the pandemic.[1]
The Office for National Statistics and the Land Registry reported that the average house prices rose by 10.3% in the year until November 2022, which is a decrease from the 12.4% increase in October, as penned by Jo Thornhill.
According to the Federal Housing Finance Agency, the average house price in the U.S. increased 12.4% from 2021 to 2022.
0. “Is the housing market about to crash? Here's what experts say” Yahoo! Voices, 3 Feb. 2023, https://www.yahoo.com/now/housing-market-crash-experts-191734802.html
1. “House prices – Forbes Advisor UK” Forbes, 1 Feb. 2023, https://www.forbes.com/uk/advisor/personal-finance/2023/02/01/house-prices-updates/
