Will home prices fall this December? Here’s what experts say
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In the post-epidemic era, Inflation surges Made Find lower mortgage rates That’s impossible because the Federal Reserve raised its benchmark interest rate and lenders followed suit, driving up the cost of home loans. Although interest rates have hovered around 4% or lower since the Great Recession, they have now surged to highest level in decadesaveraged over the points Up to 7.00%.
Home prices are also hitting new highs, with costs rising due to strong demand and limited supply.
Thankfully, for those looking to buy a home, mortgage interest rates start to fall Federal Reserve September meeting The Fed forecast a rate cut followed by a 50 basis point cut. Average mortgage rates drop more than a point, opening doors Refinance and enable some borrowers to Find affordable housing loans.
Now, some experts Borrowers warned not to wait for interest rates to fall further. Still, many are hesitant to step in, partly because the Fed has signaled further interest rate cuts in 2025 and partly because of concerns about a hot housing market and the possibility of future price declines.
Since December is typically a slow month for real estate, the big question now is whether prices will drop this month and provide a buying opportunity, forcing buyers to wait and see, or whether high costs will continue into 2025.
Start by checking out the mortgage rates you can get here.
Will house prices fall this December?
Good news for those coping with difficulties real estate market December may provide some relief from high oil prices, but there are no guarantees.
“The real estate market typically slows down in December, with fewer new listings coming to market and some properties seeing price adjustments or being temporarily taken off the market due to the holidays,” explains Rashi Malhotra, an agent at Coldwell Banker Warburg. “This often results in Prices fell slightly.”
Jennifer Roberts, an agent with Coldwell Banker Warburg, agrees, saying that this time of year, “potential buyers typically put their home search on hold unless something entices them, which would be a significant drop in price appear in the form.”
However, Malhotra warned that based on current trends, prices may not fall this year. “The new inventory currently on the market is priced competitively. Not lower, but in line with current market conditions,” she said.
UrbanDigs co-founder John Walkup also confirmed that 2024 may buck the trend. “With consumers still in spending mode and mortgage lending slowly retreating, it looks like December activity may be stronger than expected a year ago.”
Roberts also noted that a lower list price doesn’t necessarily mean a lower final sale price. “I’ve seen more than one situation where an apartment has been on the market and once the owner drops the price in December, they get more than one offer and it turns into a bidding war,” Roberts warned.
Consider mortgage pre-approval today to get ahead of any price changes.
Some sellers may insist on lowering the price (or canceling the listing)
For some sellers, December’s slowdown in activity actually makes sense no Lower the price rather than providing buyers with an incentive to trade.
“Sellers know buyers are primarily focused on the December holidays and holiday travel, so it’s not a good time to lower the price,” said Kate Wollman-Mahan, an agent with Coldwell Banker Warburg. “When buyers Price reductions have the greatest impact when noticed. It brings more attention to a listing and should be done at the right time when buyers are focused on the market rather than hotel bookings and gift purchases. ”
Unfavorable conditions may even lead some sellers to temporarily take their properties off the market entirely this month. This will make the remaining houses more difficult to buy
Darren Tooley, senior loan officer at Cornerstone Financial Services, explains: “It’s common for potential sellers to take their homes off the market around the holidays because they don’t want to worry about “This reduces inventory and may lead to higher prices.”
Supply and demand issues could keep prices high
It’s also important to remember that the current housing market has been shaped by unusual forces, including record-low interest rates during the pandemic, which led to an influx of buyers coupled with a sharp decline in new construction.
“There is still a supply and demand issue in the real estate market,” explains Domenick D’Andrea, AIF, CRC, CPFA, financial advisor and co-founder of DanDarah Wealth Management. “With demand still far outstripping supply, homes will likely continue to sell for more than asking price.”
D’Andrea also warned that many people are reluctant to list their properties now because doing so would mean giving up a loan that would be more affordable than what they would borrow today to buy a new property.
“Sellers have no incentive to sell because they still need to live somewhere and mortgage rates are likely to be much lower than they are today,” D’Andrea said. “I don’t believe that in the current environment we will be in See prices falling in the near future.”
Tooley agreed that prices are unlikely to fall, saying, “Most indexes expect home values to rise between 2% and 4% by the end of 2025.”
The good news is that some of this may depend on where you live. “While the average home in the U.S. may become more expensive, local context is everything,” Walkup said. “Sustained strength in the Northeast will be offset by potential weakness in overbought Sun Belt markets.”
Finally, wait for the price or Falling interest rates can put borrowers on the sidelines for months or even years, losing the opportunity to build equity. Rather than procrastinating and hoping that interest rates or prices might not drop, or might not have the desired impact on affordability, improve your financial situation to be able to afford a home you can comfortably buy and make an offer at the expense of making your own.
