As home prices have recovered over the past several years, prospective home buyers have become increasingly concerned about affordability conditions. After all, buying a home is a major financial commitment and getting less house for your money isn’t ideal. However, things may be changing.
A recent survey by realtor.com, of active home shoppers found that a majority think prices may have hit their peak. According to the results, 56 percent of respondents said they don’t expect prices to climb any further. That’s good news for home buyers, as slowing prices and steadier mortgage rates would help improve affordability conditions. Though home shoppers were confident that prices wouldn’t go much higher, they also expressed concern that a recession was on its way, with 30 percent of participants expecting it to begin sometime next year.
Danielle Hale, the chief economist for realtor.com, says home shoppers may be expecting a recession, but it hasn’t made them pessimistic about the housing market. When the U.S. enters its next recession, it is unlikely that the housing market will see a sharp nationwide downturn, Hale said. The same record low inventory levels that have made buying a home so difficult recently, will likely protect home prices in the next recession.