Prediction of a drop in home prices for next year may happen despite supply challenges.
Existing home supply is expected to remain low for now. (Photo: Bankrate)
Next Year’s Drop In Home Prices
An annual forecast predicts a drop in home prices in the coming year, but supply challenges remain. The report suggests that housing affordability will improve as both home purchases and rents may decrease which may result in a drop in home prices.
Existing home supply is expected to remain low which justifies the prediction of a drop in home prices next year, but new construction of homes and rentals will increase. The drop in home prices prediction is also due to the median home purchase cost being projected to decrease by $40 per month.
The drop in home prices prediction is also because of the reduction in terms of the demand to move due to decreasing mortgage payments, leading to fewer available houses. In regards to the drop in home prices, rent prices are also expected to decline slightly.
According to a published article by The U.S. Sun, despite the drop in home prices prediction, the lack of housing units limits the decline in rent prices.
Overall, while there are improvements in affordability as well as a confident prediction of a drop in home prices, supply challenges still exist in the housing market.
Canada Rent Prices
In a published article by CBC, rent prices in Canada are rising at an unprecedented rate, with the average rent in October reaching $1,976, an increase of 11.9%. This increase is well above the country’s inflation rate. This surge in rent prices is caused by people being priced out of the real estate market.
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