US Housing Market Home Prices Outlook: Record High Rates in the Sunbelt

The US housing market is experiencing unprecedented growth, poised to hit a record $50 trillion valuation. This record high is driven by a persistent imbalance between supply and demand.

With fewer homes available for sale, prices have continued to rise, pushing the total market value to $49.6 trillion as of June 2024.

Key Points:

Home values shot up by $3.1 trillion over the past year.
The market is expected to hit the $50 trillion mark by mid-2025.
Mortgage rates are high, with a 30-year fixed rate averaging 6.47% recently.

Supply-Demand Imbalance

A significant factor in this growth is the low supply of homes for sale. Many homeowners remain in their current properties due to high borrowing costs, reducing the number of homes entering the market.

Even though mortgage rates have started to decrease, they are still high enough to dissuade both potential buyers and sellers from making moves.

Current Market Stats:

4.7% increase in home prices in June 2024.
5.4% drop in existing home sales year-over-year for June.
Some cities, especially in the Sun Belt, are seeing price drops of up to 11%.

Regional Variances

While the overall trend is upward, not all regions are experiencing the same rate of growth. Areas that saw a surge in demand during the pandemic are now seeing price stabilization or even declines.

For instance, cities in the Sun Belt have noted the most significant price drops, as the pandemic-driven demand cools off.

Regional Trends:

Sun Belt cities face up to 11% price declines.
Other areas continue to see steady price increases.
Nationally, prices have generally risen, reflecting the broader supply-demand imbalance.