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The median sale price of an existing single-family home was $361,700 in 2021’s fourth quarter, a 14.6-percent gain from a year earlier, in 181 of the 183 metro areas watched by the National Association of Realtors (NAR), the association reported.
However, the price was slightly less than the $363,000 median set in last year’s third quarter.
In 67 of the areas, prices rose more than 10 percent year on year, compared to 78 percent in the third quarter, indicating a slight easing of price gains.
The typical mortgage payment in the quarter was $1,240, compared to $1,039 the year before, the NAR said.
Mortgage interest rates are expected to rise when the U.S. Federal Reserve boosts its benchmark rate, almost certainly next month, “which likely will have an adverse impact on home buyer demand,” Sam Khater, chief economist at the Federal Home Loan Mortgage Corporation.
Active listings in January were 29 percent fewer than a year earlier as home buyers hurried to lock in deals before rates go up, according to online brokerage Redfin.
Millions of Millennials entering their prime home-buying years and the shift to remote work are keeping demand for houses strong, The Wall Street Journal noted.
TREND FORECAST: We maintain our forecast that when the Fed rates significantly rise to 1.5 percent, 2 percent range, it will bring down the housing boom… not destroy it, but slow it and bring home prices down.
But not down dramatically, since unlike the real estate bubble that helped ignite the Panic of ’08, this time those who bought houses could afford them… there were no subprime mortgage deals during this COVID War home buying spree.
The continuing demand for homes by employees who are part of the new remote workforce emphasizes our long-standing forecast that the market for commercial office space will permanently shrink.
The consequences of that loss include a loss of income for landlords, both from empty office suites and from having to charge lower rents to lure tenants. Investors will eat their losses.
Office towers in cities where they once anchored an economy, such as New York and San Francisco, will see property values slide; those cities will lose property taxes, a key source of revenue, forcing either higher taxes on remaining landlords, cuts to public services, or both.
We have detailed the gradual decline of urban office economies in articles such as “Office Workers’ Slow Return Endangers Landlords, City Finances” (9 Mar 2021), “New York Office Vacancies Set Record” (13 Jul 2021) and “Will Delta Variant Kill Commercial Office Space?” (3 Aug 2021).