INDIANAPOLIS — The hot housing market could tumble by as much as 25% by the end of the summer, according to a chief economist.
The analyst, quoted by Yahoo Finance, said the housing market is in the early stages of a substantial downshift, based on data from the Mortgage Bankers Association that shows an 8% decrease in loan applications.
However, a local realtor isn't expecting that soon in Indiana. Amy Spillman of CENTURY 21 Scheetz said the market is still hot with a steady increase in sales across central Indiana.
In February, while national home sales decreased by 2.4%, Indiana saw a 3% increase.
She has, however, seen an uptick in rates, which will limit the buyer pool. That means not as many people will make competitive offers.
"We don't think that home prices are coming down anytime soon," Spillman said. "We think that will remain steady, but we do think that it may eliminate some of the competition as the rates shift and people's financial situations change."
Right now, the average monthly mortgage payment has increased by more than $400 per month.
Interest rates are historically low. Spillman said you should plan for interest rates to increase. Her team expects them to continue to tick up through this year.
As for rental properties, Spillman said to expect the lease price to keep going up at renewal.
"I do not think that we will see those rents starting to come down anytime soon," Spillman said. "They're following the same trends that the buying market is, and so they're continuing to increase those prices."
During the pandemic, people had new housing needs, like working and learning from home, so they invested more into their homes. Spillman said they continue to see that demand with buyers in Indiana.