Title: U.S. Housing Market Faces Modest Price Correction, But Some Areas at Higher Risk
The lack of available homes for sale in the United States has led to an increase in home prices, making housing affordability a pressing issue. However, rising mortgage rates have further deteriorated the chances of potential homebuyers being able to enter the market.
In a recent report, investment research firm Morningstar predicted that the national housing market is currently undergoing a moderate price correction. Prices are expected to decrease by around 4% to 6% from their peak by 2024. Despite this correction, the market is being supported by factors such as the rate lock-in effect, conservative lending standards, and a shortage of available housing stock.
Identifying areas at the highest risk of a price correction, Morningstar highlighted 15 major housing markets, including San Diego, Austin, Colorado Springs, Provo, and Nashville. Among these, Salt Lake City is considered the most at-risk metro for a home price correction. Affordability issues, increased inventory levels, and longer average days on the market contribute to this risk.
While the national home price correction has been relatively mild, overheated Western housing markets like Austin and Boise have already experienced declines of around 10% in prices. In contrast, Northeast and Midwest markets, considered relatively affordable, are expected to be at lower risk for correction.
The report also revealed the 15 major markets with the lowest level of risk, primarily located in the eastern half of the country. These markets include Hartford, Syracuse, Allentown, and New Haven. Among these, Hartford, Connecticut, is considered the least at risk for a price correction. The city’s modest population growth, availability of affordable housing options, declining inventory, and stable average days on the market contribute to its favorable outlook.
As the housing market continues to evolve, these insights from Morningstar provide valuable information for those looking to make informed decisions regarding property investment and homeownership. While there is an overall expectation of a modest price correction in the national market, investors and homebuyers are urged to analyze local market trends and factors specific to their desired locations.
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