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Forecast: Global Housing Market Braces for Steady Growth Amidst Supply Shortage

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A Calm Rise Amid Challenges

As the world grapples with the aftermath of a pandemic-driven housing boom and subsequent correction, housing specialists predict a gentle climb in home prices across major property markets. The shortage of affordable homes is expected to persist, casting a shadow on the real estate landscape for the next few years.

Interest Rates Dance, Homeowners Pause

Global central banks, in a bid to tame inflation, have nudged mortgage rates higher, deterring existing homeowners from selling properties secured at lower rates. This cautious stance is palpable, especially in the United States, where homeowners on favorable fixed rates choose to bide their time in anticipation of rate drops.

Mortgages Ebb, Supply Stagnates

While recent months witnessed a slight dip in mortgage costs following speculations of central banks cutting rates, experts foresee no return to pre-pandemic interest levels in the near future. The constrained supply in many markets exacerbates the situation, with homeowners reluctant to relinquish their advantageous mortgage deals.

Global Market Overview

An analysis of major property markets reveals contrasting forecasts, with only Germany and China anticipating a decline in home prices due to economic slowdowns. Despite experiencing significant surges during the pandemic, most markets saw marginal retreats last year, pricing out many potential buyers and skewing demand towards luxury accommodations.

Projections and Challenges

Economists predict central banks will initiate rate cuts around mid-year, although delays are more likely than early implementations. Affordability remains a critical issue, with strong demand fueled by robust labor markets and wage hikes. However, the persistent dearth of affordable housing poses a long-term challenge with no immediate solutions in sight.

Future Forecast and Analysis

In a survey, analysts foresee the affordability gap between demand and supply to either stagnate or widen in the next few years. While a majority believe that first-time homebuyers’ affordability will improve in the coming year, the underlying challenge lies in the mismatch between housing types and locations, a problem that may take decades to rectify.

Reuters poll – Average home price change outlook https://tmsnrt.rs/4c0O6iu

(Reporting by Hari Kishan and Sarupya Ganguly; other reporting and polling by Anitta Sunil, Maneesh Kumar, Prerana Bhat, Pranoy Krishna, Jonathan Cable, Anant Chandak, Sarupya Ganguly, Milounee Purohit, Susobhan Sarkar, Devayani Sathyan, and Vijayalakshmi Srinivasan;)

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