Housing Market Outlook: Home Prices Could Start Falling This Summer

More homes are languishing on the market without any buyers, causing prices to begin falling as soon as this summer, according to Brian Nick, senior investment strategist at the Macro Institute.

In fact, the year-over-year percentage increase in existing unsold homes for sale is the highest since the Great Financial Crisis, he told Bloomberg TV on Thursday.

“That will put downward pressure on prices in the next three to six months,” he predicted.

For now, the housing market is still in its traditional spring selling season, when Americans typically buy homes as families try to secure a new home before the start of the next school year.

According to some, this season is a disappointment as the growing supply of housing has met with tepid demand from buyers rebelling against high prices.

And as the selling season ends in the summer and heads into fall, Nick said home prices will begin to decline and erode consumer confidence. While high prices have demoralized potential buyers, they have boosted sentiment among homeowners along with the strong job market.

“Once they start seeing housing prices drop (maybe the house next door costs a little less than what they’re asking, unlike what they’ve been seeing in recent years), that will affect their ability to afford housing.” spend and your willingness to spend. too,” he warned. “The housing market is really the first domino to fall in what we think will be a slower growth story going forward.”

Other housing market observers have also pointed to a shift, with more buyers rejecting the high home prices demanded by sellers.

Compass co-founder and CEO Robert Reffkin told CNBC last month that 30% of the inventory on the market has seen a price drop, more than any other time in the last decade, with supply increasing. of 16%.

“It’s a different environment. Now we see more sellers than buyers,” she stated.

But that weakness is still masked by national figures, which show home prices rising. The most recent S&P CoreLogic Case-Shiller Index showed prices rose 6.5% in March from a year ago, hitting a new all-time high. Separate data from Redfin showed they were up 7.3% in April from a year earlier.

For his part, Nick, from the Macro Institute, noted that the number of existing homes for sale has now increased by 8% to 10% annually, suggesting that prices will soon fall.

“This imbalance between supply and demand is beginning to be corrected, which could mean that we will begin to see lower prices this summer,” he said.

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