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Wells Fargo reports that home sales have plummeted to levels reminiscent of the Great Recession, with January figures at 4.7 million, only slightly above the 2008-2010 lows. High home prices and mortgage rates are deterring buyers, while sellers are reluctant to part with their low-rate mortgages, leading to a stagnant market. Affordability issues are expected to keep sales weak for the foreseeable future, with only 24% of buyers being first-timers in 2024, the lowest on record.
Wells Fargo reports that home sales in January reached 4.7 million, only slightly above post-Great Recession levels, primarily due to high home prices and mortgage rates. The ongoing affordability crisis, exacerbated by a significant shortfall of available homes, is expected to keep sales weak for the foreseeable future. Despite some easing in mortgage rates, the average monthly payment has more than doubled in five years, leading to a housing market that resembles a recession despite a booming economy.
Mortgage rates are projected to remain above 6% through 2026, with an average of 6.9% in 2025 and 6.5% in 2026, according to Wells Fargo. Despite anticipated interest rate cuts from the Federal Reserve, home borrowing costs are expected to stay elevated due to rising home prices and ongoing inventory shortages, which are exacerbating affordability issues for buyers. Home prices are forecasted to increase by 4.3% this year, further straining the market as sales lag behind pre-pandemic levels.
Charlie Dougherty
People
The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
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