While some buyers have forged ahead, others have put their home search on hold or have given up entirely because the rising costs have put ownership out of reach.
But as recession fears for the larger economy loom, the housing market is showing signs of slowing. Sales of new construction homes are down and construction is stalling. Sales of existing homes have dropped and are trending below 2019 levels. As mortgage rates remain above 5%, applications have fallen to their lowest level in 22 years.
Still, neither home prices nor mortgage rates are expected to plummet and affording a home is likely to remain a challenge for the rest of the year, economists say. Home price gains are slowing, but year-over-year prices are still seeing double-digit increases. And the Federal Reserve announced another rate hike this week, which will keep mortgage rates volatile.
