The housing market is beginning to show signs of getting back to normal. This is indicated by fewer contract signings and decrease in pending home sales recently. The only area that has seen an increased number of sales is the northeast. With fewer contract signings this is an indication that the market may be calming and moving towards a more normal market condition. Now that interest rates are increasing this reduces the number of potential buyers, therefore slowing the number of homes being sold. The desire to purchase a new home remains strong, but the financial ability has become a limiting factor. Some are expecting interest rates to keep rising throughout 2022 and into 2023. This will lead to fewer home sales. Home prices are not expected to decline, but price gains will steady decelerate their rapid rise. Rental costs will keep rising creating the possibility of more renters willing to explore homeownership. Finally, fast-rising rent prices and higher mortgage rates may lead to multifamily housing starts.
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