{"id":7926,"date":"2022-07-25T06:00:24","date_gmt":"2022-07-25T10:00:24","guid":{"rendered":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=7926"},"modified":"2022-07-25T06:00:24","modified_gmt":"2022-07-25T10:00:24","slug":"whats-causing-ongoing-home-price-appreciation","status":"publish","type":"post","link":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=7926","title":{"rendered":"What\u2019s Causing Ongoing Home Price Appreciation?"},"content":{"rendered":"
\n

\"What\u2019s<\/p>\n

If you\u2019re thinking about making a move<\/a>, you probably want to know what\u2019s going to happen to home prices<\/a> for the rest of the year. While experts say price growth<\/a> will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won\u2019t fall. Here\u2019s a look at two key reasons experts forecast continued price growth: supply and demand.<\/p>\n

<\/span><\/p>\n

While Growing, Housing Supply Is Still Low<\/strong><\/h4>\n

Even though inventory is increasing<\/a> this year as the market moderates<\/a>, supply is still low. The graph below helps tell the story of why there still aren\u2019t enough homes on the market today. It uses data<\/a> from the Census<\/em> to show the number of single-family homes that were built in this country going all the way back to the 1970s.<\/p>\n

\"What\u2019s<\/a><\/p>\n

The blue bars represent the years leading up to the housing crisis in 2008. As the graph shows, right before the crash, homebuilding increased significantly. That\u2019s because buyer demand was so high due to loose lending<\/a> standards that enabled more people to qualify for a home loan.<\/p>\n

The resulting oversupply of homes for sale led to prices dropping during the crash and some builders leaving the industry or closing their businesses \u2013 and that led to a long period of underbuilding of new homes. And even as more new homes are constructed this year and in the years ahead, this isn\u2019t something that can be resolved overnight. It\u2019ll take time to build enough homes to meet the deficit of underbuilding that took place over the past 14 years.<\/p>\n

Millennials Will Create Sustained Buyer Demand Moving Forward<\/strong><\/h4>\n

The frenzy the market saw during the pandemic is because there was more demand than homes for sale. That drove home prices up as buyers competed with one another for available homes. And while buyer demand has moderated today in response to higher mortgage rates, data<\/a> tells us demand will continue to be driven by the large generation of millennials aging into their peak homebuying years (see graph below<\/em>):<\/p>\n

\"What\u2019s<\/a><\/p>\n

Odeta Kushi, Deputy Chief Economist at First American<\/em>, explains<\/a>:<\/p>\n

\n

\u00a0\u201c. . . millennials continue to transition to their prime home-buying age and will remain the driving force in potential homeownership demand<\/strong> in the years ahead.\u201d<\/em><\/p>\n<\/blockquote>\n

That combination of millennial demand and low housing supply continues to put upward pressure on home prices. As Bankrate<\/em> says<\/a>:<\/p>\n

\n

\u201cAfter all, supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply, thanks to a combination of little new construction and strong household formation by large numbers of millennials<\/strong>.\u201d<\/em><\/p>\n<\/blockquote>\n

What This Means for Home Prices<\/strong><\/h4>\n

If you\u2019re worried home values will fall, rest assured that experts forecast ongoing home price appreciation thanks to the lingering imbalance of supply and demand. That means home prices won\u2019t decline.<\/p>\n

Bottom Line<\/strong><\/h3>\n

Based on today\u2019s factors driving supply and demand, experts project home price appreciation will continue. It\u2019ll just happen at a more moderate pace as the housing market continues its shift back toward pre-pandemic levels.<\/p>\n

Content previously posted on Keeping Current Matters<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

\"What\u2019sIf you\u2019re thinking about making a move, you probably want to know what\u2019s going to happen to home prices for the rest of the year. While experts say price growth will moderate due to the shifting market, ongoing appreciation is expected. That means home prices won\u2019t fall. Here\u2019s a look at two key reasons experts [\u2026]<\/div>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"bgseo_title":"","bgseo_description":"","bgseo_robots_index":"","bgseo_robots_follow":"","footnotes":""},"categories":[3,84,85,86,121],"tags":[],"class_list":["post-7926","post","type-post","status-publish","format-standard","hentry","category-blog","category-for-buyers","category-for-sellers","category-housing-market-updates","category-pricing"],"_links":{"self":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/7926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7926"}],"version-history":[{"count":0,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/7926\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}