What’s ahead for residential real estate sales?

Over the last two years, homes have been selling very quickly and home prices have been higher than ever. For example, between June 2020 and June 2022, the median price rose by 31%. On a national scale, this means that homes now cost around $450,000. That’s nearly 17% higher than the same time in 2021.

Much of the reason for this has often been attributed to a lack of supply and an increase in demand. In short, there were a lot of people who wanted to buy homes and not many homes on the market, so the prices skyrocketed for those homes that did go up for sale.

However, some parts of this trend seem to be changing. Housing has now hit the largest slump for new mortgage applications that has been seen since 2000. This means that a lot of buyers are leaving the expensive home market and some are worried about an upcoming recession.

Will this lower prices?

Since supply and demand issues have often been blamed for the high prices, there is a chance that less demand could mean that prices fall again. This is coupled with the fact that interest rates have been rising, which also makes some potential buyers step away.

However, home prices have not fallen dramatically as of yet, so it remains to be seen what sort of impact this change is going to have. It could be that the demand stays higher than the level of supply, even though there are fewer buyers.

In a complicated and volatile market, make sure that you know exactly what legal steps you’ll need to take when buying your new home. You want to ensure that the process goes smoothly.