US housing market to remain stuck in a rut as high rates choke demand: Reuters poll

Core Insights - The U.S. housing market is expected to remain weak through next year due to high mortgage rates, with only a modest rebound anticipated in 2027 [1][3] - Persistent supply shortages and affordability issues have kept first-time buyers out of the market, while existing homeowners are reluctant to sell properties with lower mortgage rates [1][2] Market Conditions - Active listings have increased to their highest level this decade, but mortgage rates around 6.5% continue to suppress demand [2] - Home prices, as measured by the S&P CoreLogic Case-Shiller index, have declined for four consecutive months, marking the first such streak since February 2023 [2] Price Expectations - Home prices are projected to rise by only 2.1% this year and 1.3% in 2026, significantly lower than previous estimates of 3.5% for both years [3] - A slight recovery in home prices is expected in 2027, with a projected increase of 3.0% [4] Buyer Demographics - The median age of first-time homebuyers is now 38, a record high compared to the late-20s typical in the 1980s, indicating a growing affordability crisis [5] - Current average home prices are nearly 60% above pre-pandemic levels, further complicating access for young buyers [5] Interest Rate Impact - Lower interest rates could improve purchasing affordability for first-time buyers, but the relief is expected to be marginal [6] - The 30-year mortgage rate is forecasted to average 6.37% next year and 6.20% in 2027, remaining significantly higher than the approximately 4% typical of the previous decade [7]