DAVENPORT, Iowa — The housing market has been up and down since the beginning of the COVID pandemic, but the US is once again in a tough spot, analysts said.
Home prices have declined by about 2.5% since the peak in Spring 2022, and is expected to continue dropping in 2023.
But interest rates are still high, and 30-year fixed mortgages recently peaked at 7% in November 2022, which makes home buying challenging.
"The doom and gloom of the mortgage prices, the interest rates going up - people are gonna wait to see how high they get before they come back down," RE/MAX Concepts Quad Cities Managing Broker Kim Broders said. "It's kind of a waiting game, but it has slowed our market down a little bit."
However, Broders said the local housing market is still relatively healthy. She said the Midwest market outside of the largest cities tend to be less affected by national trends.
In particular, houses in the low to mid-range costs, around $100,000-$150,000 in the Quad Cities, are still selling at market value or higher.
And while popular and well-presented homes are still selling well above listing price, Broders added that they're not seeing extreme selling prices like there were in the past two years.
"We're going to be seeing more of a normal market, you know, things that we saw five, six, seven years ago," she said. "Houses will be a few more days on the market and there won't be as much pressure on homes with competing offers."
Buying and selling houses is only one part of the story, however.
Renting prices across the U.S. have continued to climb. In the Quad Cities, the average rent is around $900 per month.
According to realtor.com, the national average rent price has increased by 20% over the past three years.
Kim said this had lead to another shift in the home buying market, where more renters are showing interest in becoming first-time home owners.
When talking to WQAD, Kim mentioned a Davenport property that her agent had eight offers for already.
"All eight of these buyers are probably renting first-time homebuyers that are renting now and want to get into a house where they can build equity and improve their credit scores - all those good things that are the American dream," she said.
She added that most properties aren't seeing nearly as many offers as in the past couple of years, so the prices are staying closer to the owner's original asking price, which is making it easier for first-time buyers to find a home.
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