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Housing Market Getting Back to Normal Experts Say

According to experts, surging inflation and fears of recession have caused the U.S. housing market to get back to normal. This follows a prolonged period of high demand and sky-rocketing prices.

According to DLB Financial Services CEO Debbie Boyd, the current state of the U.S. housing market indicates a return to pre-pandemic levels. However, that doesn’t mean any sort of market crash is upon us.

“What we’re going to do is just go back to normal,” Boyd told Yahoo Finance. “Before COVID, you would put your house on the market, and it may stay there two or three months, and you’d get a couple of offers. We’re back to normal, and normal means things are going to go a little bit slower.”

Increased mortgage rates have played a significant role in cooling down the housing market. The 30-year fixed mortgage was at 3.55% in early 2022, with forecasts indicating a jump to 4% by the end of the year. However, what happened was that the Fed hiked their interest rates, causing the mortgage rates to shoot to peak at 5.81%. The 30-year fixed mortgage stands at 5.30% at the moment.

As a result, homebuyers are backing out of their contracts and becoming increasingly inactive on the market. The sales of new U.S. single-family homes are down to their two-year lows in June and are now reaching the early pandemic numbers. In May, the sales went down 17.4 on a year-on-year basis.

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