The real estate market has been ablaze recently but is slowly cooling down a bit. Valuations have gone through the roof in some localities. Home flippers have been fast at work remodeling homes taking advantage of the frenzy to the delight of many municipal tax assessors.

“Financial conditions have shifted in a big way since the end of 2021 and the housing market is adjusting accordingly,” said Danielle Hale, Chief Economist for Realtor.com. “As Americans grapple with higher prices for everyday expenses while today’s buyers face housing costs that are up 50% from a year ago, recent home sales data shows some are taking a step back from the market.”

While Americans have faced a whirlwind of changes so far this year, a changing economic landscape is the biggest driver of updates to Realtor.com’s 2022 housing forecast. Inflation has made a more significant and long-standing impact on real estate markets than was anticipated six months ago, and is reflected in trends like rapidly-climbing mortgage rates.

Combined with record-high home listing prices and rents, home shoppers are feeling the strain on their budgets. As a result, buyer demand has been softening this Spring from its early 2022 surge.

Higher costs will continue to challenge 2022 buyers, as mortgage rates have already far surpassed Realtor.com’s earlier prediction of 3.6% and home sale price growth year-over-year is expected to more than double its originally-forecasted pace (+6.6% vs. 2.9%). At the same time, Realtor.com’s updated projection for year-end 2022 mortgage rates (5.5%) anticipates that rates have largely adjusted for the bulk of expected 2022 Fed hikes.” Posted on MReport: Market Cools as Home Sales Moderate, Price Growth Eases – theMReport.com https://themreport.com/daily-dose/06-13-2022/market-moderate-sales

Tomorrow, the Fed Reserve will determine if there will be a rate hike to offset the inflation that surrounds those living in the U.S. A news piece, likely a leak from the Fed, suggested a .75 percent rate increase even though the market rhetoric has been expecting a ½ point increase. We’ll see tomorrow. Increased interest rates will slightly dampen real estate demand.

However, if one considers an inflation of 10.5%, whatever the slight increased interest rate cost for a mortgage, should have little impact on the overall increase tendency for home valuations. Since everything produced in some way is energy dependent, until fuel prices decrease and reckless