The housing market is always a hot topic in today’s economy, and this year is no exception. Home prices have been on an upward trajectory for the past few years, but new evidence suggests that the prices may be about to cool off.
In a recent survey conducted by CoreLogic, it was discovered that home prices in the U.S. rose by just 0.3 percent in May compared to April. This marks the slowest pace of growth since November 2012. Home prices in the 20 cities tracked by the survey grew by 5.3 percent compared to a year ago, down from a 5.7 percent gain in April.
Todd Teta, chief product officer at CoreLogic, notes that “while the low points of home prices last October and February suggested that the market may have already bottomed out, the May data for national home prices suggests that they may remain largely flat or even begin to decrease.”
The cause of this likely slowdown in home price growth is largely due to an increase in housing inventory. As a result of increasing housing stock, more buyers have more choices, which in turn depresses prices. In addition, the wobbly economic conditions of late have caused buyers to be more cautious about making such a major purchase.
So, what does all this mean for potential home buyers/sellers? For starters, buyers may be in a better position to negotiate better prices, while sellers may want to list their home sooner rather than later to take advantage of the current strong market prices.
All eyes will be on the housing market in the next few months to see if the recent data holds up. It’s still too early to tell whether home prices will remain relatively flat or start to cool off in the long run, but what is certain is that anyone interested in buying or selling in the near future should be aware of the conditions of the market.