<\/p>\n
This year was supposed to mark a turnaround for the U.S. housing market. After years of high mortgage rates, ever-rising home prices, and millions of homeowners staying put due to their pandemic-era low interest rates, experts said things were finally going to change.<\/p>\n
The National Association of Realtors predicted a 14% jump in home sales. <\/p>\n
Redfin even forecasted a \u201cGreat Housing Reset,\u201d wherein sales would improve, home prices would normalize, and incomes would rise to give Americans more buying power.<\/p>\n
According to Bankrate, though, the reset hasn\u2019t happened \u2014 and it likely won\u2019t either.<\/p>\n
Why the housing market isn\u2019t resetting as expected<\/p>\n
Stubbornly high mortgage rates are one reason the housing market has failed to shift tides.\u00a0<\/p>\n
Going into 2026, rates had been on a steady decline for months, finally dipping below 6% in February. But after that, rates popped back up, and the average 30-year mortgage rate has hovered in the 6.25% to 6.50% range for months.\u00a0<\/p>\n
It seems they\u2019re not going anywhere soon, either. The Mortgage Bankers Association\u2019s latest forecast shows rates staying around 6.3% through the end of 2027. Fannie Mae\u2019s newest predictions are similar.<\/p>\n
These rates not only discourage buyers from jumping in, but they lock up housing supply, too. With many homeowners carrying an ultra-low pandemic-era rate on their current mortgage, it just doesn\u2019t make sense to sell their homes and trade up for a higher rate.<\/p>\n
This limited supply is part of the reason home prices keep setting records, another thing holding housing back. April saw the median sale price of homes hit its highest point on record \u2014 $417,700. Only a few years ago, it sat below $300,000.<\/p>\n
Mortgage rates, home prices, and the labor market are holding the housing market back this year.<\/p>\n
Photo by Bloomberg on Getty Images<\/p>\n
The economic climate is discouraging buyers, too<\/p>\n
There are other drivers, too, Bankrate\u2019s analysis says. The job market, for one, is holding buyers back.\u00a0<\/p>\n
Though the unemployment rate has held steady at 4.3% since March, raises are declining, involuntary part-time work is up, and people are working less overall.\u00a0<\/p>\n
\u201cEmployment increased in April, but more people are working fewer hours and earning less in real terms \u2014 that\u2019s not a household that goes shopping for a house,\u201d Orphe Divounguy, a senior economist at Zillow, told Bankrate. \u201cThe labor market isn\u2019t falling apart, but it isn\u2019t giving households the confidence or financial cushion they need to buy or move.\u201d<\/p>\n
More on housing and mortgages:<\/p>\n
Home repair costs are soaring \u2014 especially in one Florida cityMortgage refinances tumble as high rates quash borrower savingsHousing market takes major hit in popular southern state<\/p>\n
Rising inflation \u2014 which now sits at its highest point in three years \u2014 and soaring gas prices aren\u2019t helping either. Gas prices have reached over $6 per gallon in some states, according to AAA. Experts say they\u2019ll likely stay high (or even rise) until the war in Iran is over.<\/p>\n
\u201cAfter the slow start to the year, a double-digit jump in sales will materialize only if the housing market experiences a robust rebound in sales in the coming months,\u201d wrote Bankrate\u2019s housing market analyst Jeff Ostrowski. \u201cBut with mortgage rates still high, home prices setting new records, and oil prices soaring, that scenario is seeming increasingly unlikely.\u201d<\/p>\n
Related: Mortgage rate gridlock sparks housing market shift<\/p>\n
#Bankrate #bold #housing #market #reset #claim<\/p>\n","protected":false},"excerpt":{"rendered":"
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