While the housing market is already down shifting, how far the market dips will depend on where the economy moves this year as the Federal Reserve tries to keep a lid on inflation by rising interest rates. Although the Fed doesn't set mortgage rates, its actions affect the mortgage market.
That has real consequences for homebuyers who are watching their prospective monthly mortgage payments rise. For a 30-year, fixed, rate loan for median-priced Houston home in the fourth quarter of 2022, monthly payments hit $2,350 - up from about $1,660 a year earlier, including insurance and taxes, according to. Rising mortgage rates and higher home prices have spurred many buyers to sit on the sidelines.
But so far this year, a recession isn't imminent, which could keep interest rates elevated for longer, he added.