The United States housing market has been on a steady increase over the past few years. There has been a major increase in the number of new homes being bought and sold across the nation. During the start of the pandemic, the interest rates on houses were lowered to help revive the economy and keep it afloat during hard times. This year, there is a steady rise in mortgage rates outside of slight dips here and there. This rise in mortgage rates combined with an already high-priced housing market is making the market even less affordable. However, there recently has been a change in the amount of time houses have been sitting on the market. For the first time in almost two years, the first annual increase in the amount of time a house spends on the market is being noticed. This extra time on the market is also reflecting the steady drop in the asking prices of houses seen by many owners.
Currently, 1 in 5 home sellers are dropping their asking price. This is a 9% increase over the mere 11% noted a year ago. The median listing price in August has dipped from $449,000 to $435,000 since July. As of recent, homes are not selling at the record-breaking pace that has become a norm across the nation. Despite the decrease in the pricing of homes, there will still be a 14.9% increase over the next year. Nonetheless, this is still positive when compared to the 17.8% increase that was originally predicted. One of the main reasons for this sudden dip in asking prices is the number of new homes being put on the market. The real reason for the spike in prices was a combination of low interest rates being enforced because of the pandemic and the scarce amount of homes that were on the market. This trend will continue to take place as long as houses sit on the market.
Similarly, the United Kingdom dealt with a major spike in housing prices over the last few years. Like the U.S., the UK’s increase was also in tandem with the COVID-19 pandemic. Unlike the U.S., the UK has not seen a halt in the prices of housing. The average cost of a home in the United Kingdom is £294,260 or around $338,880 in U.S. dollars. To put this in perspective, in 2018, the average cost was around £231,000 or about $265,954 U.S. dollars. The nation was predicted to have a 5% price slowdown in 2022 but instead had to revise this number to 7%. On the bright side, the 5% fall mentioned earlier is predicted to occur over the next two years.
If homes continue to sit on the market, this trend will only continue its pattern. This is not a shock to many around the world because the circumstances that caused the increased housing market interests were only temporary fixes. To combat the egregious amount of growth seen by the housing market industry, many markets are picking up the pace of building and developing different real estate properties. This, in turn, will help fix the market and restore it to its normal form. As the nation continues to strengthen itself and recover from the pandemic, the housing market will slowly begin to return to its normal rates.