Headline RoundupJune 20th, 2022

Is the Housing Market Cooling Down?

Summary from the AllSides News Team

After two years of soaring home prices fueled by the COVID-19 pandemic, economists are saying that the housing market is starting to cool off.

Many factors such as lack of inventory, low interest rates and work location flexibility have attributed to the red-hot housing market. With the Federal Reserve raising its benchmark interest rate by 0.75 basis points, more mortgage rates are expected to come. According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage climbed to 5.78% for the week ending June 16 – the highest level recorded since 2008. With home sales and overall consumer demand dropping, combined with an increase of houses being placed on the market, some experts are predicting that prices will start to simmer down.

Many experts from across the spectrum emphasized that the current housing crisis won't be "nearly as rough" as the housing crash that preceded the Great Recession. Many voices see this shift as a "much-needed rebalancing" from the current unstable and unpredictable market conditions, which should ultimately "benefit first-time buyers." Conversely, some conservative voices highlighted how the lack of optimism among home builders "reflects high inflation" and that the federal government should take action to "reduce its subsidies of the housing market."

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