Where are U.S. house prices at in the current market?

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U.S. house prices see largest yearly decline since 2012

The median home price for existing homes in the U.S. fell by 1.7% last April to $388,000 this year. This is the biggest drop since January 2012 when home prices fell by 2%. Home prices are far off their peak from May 2021 when the median home price for existing homes was over $400,000.

Where is the housing market getting its direction from?

According to a recent discussion with Realtor.com’s chief economist, Danielle Hale, and Interactive Brokers chief economist, Jose Torres, the housing market is heavily influenced by where inflation trends and the Federal Reserve are going.

When asked about trends dictating the market, Hale stated, “So we know that a lot of existing homeowners, roughly 2/3, have mortgage rates that are locked in at or below 4%. And so the narrower that gap is between market mortgage rates and the mortgage rates that people hold on their existing mortgages, the easier it is for existing homeowners to make the decision to move and trade up. But right now, the incentive just isn’t there. As long as their home is a reasonably good fit for their needs, it’s hard to make the case for moving.”

Torres followed up by saying, “Real estate makes up about 20% of the economy. So when transactions go down, there’s a lot of income weakness across, from realtors to durable goods manufacturers to construction companies and all of the above. And really, I think a lot of what is going to determine where the real estate market is going to go is where inflation is going and where the Fed is going.”

What is a HECM?

Do you need additional funds for your retirement, but aren’t sure what to do? Look into a home equity conversion mortgage (HECM)* to tap into your home equity.

A HECM is a type of loan that allows you to get paid by a lender out of the equity you have built in your home.

There are a few requirements to be aware of as this type of arrangement is only available to seniors. You’ll need to be at least 62 years old, own 60% or more of your home’s equity, in most situations, and apply for a reverse mortgage using your primary residence.

Do you have additional questions about how to get into a HECM? Contact our team of specialists to get more information.   

*Charges such as an origination fee, mortgage insurance premiums, closing costs and/or servicing fees may be assessed and will be added to the loan balance. The loan balance grows over time, and interest is added to that balance. Interest on a reverse mortgage is not deductible from your income tax until you repay all or part of the interest on the loan. Although the loan is non-recourse, at the maturity of the loan, the lender will have a claim against your property and you or your heirs may need to sell the property in order to repay the loan or use other assets to repay the loan in order to retain the property. You should know that a reverse mortgage is a negative amortization loan which means that your mortgage balance will increase while your home equity decreases if you do not make principle and interest payments on your loan. This may make it more difficult to refinance the loan or to obtain cash upon the sale of the home. However, you will never owe more than the home is worth when the loan is repaid.

*This is not a commitment to lend. The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid. Otherwise, the loan must be repaid when the last borrower passes away or sells the home. Prices, guidelines and minimum requirements are subject to change without notice. Some products may not be available in all states. Subject to review of credit and/or collateral; not all applicants will qualify for financing. It is important to make an informed decision when selecting and using a loan product; make sure to compare loan types when making a financing decision. This material has not been reviewed, approved or issued by HUD, FHA or any government agency. Guaranteed Rate, Inc. is not affiliated with or acting on behalf of or at the direction of HUD, FHA or any other government agency. To find a Reverse Mortgage counselor near you, search the HECM Counselor Roster at https://entp.hud.gov/idapp/html/hecm_agency_look.cfm or call (800) 569-4287.

in 10 minutes?

The pre-approval process is lightning fast, and can be completed
in under 10 minutes. Grab a few important documents to get started.
  1. Tax Returns
  2. Copies of W-2s (or 1099s for independent contractors,
    freelancers and the self-employed)
  3. A payroll stub
  4. A bank statement
  5. Loan obligation info (student loans,
    auto loans and credit cards)

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. 

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.