It is very true that the housing market is coming back nicely; however, there is one thing that could slow down its current momentum: overpricing homes. It is hard to tell how much more the market can handle of the increasing trio of inventory, interest rates, and sales price.
According to Trulia just asking prices have increased by 10.7% in the past year, 4.1% in the past quarter, and 1.5% in the past year. If you were to look at the quarterly and monthly rates annualized, it would bring them to 16.4% and 18%, respectively. This doesn’t even account for when the property went above asking price in multiple offer situations! However, price appreciation should slow as interest rates and inventory keep increasing.
Read the full article here to learn more about how a buyers purchasing power changes as interest rates go up and what effect this will have on prices!