Interest rates will continue to rise, squeezing buyers and slowing demand.
After hovering for the last three years in the 3 percent range, the average rate on the 30-year fixed mortgage has hurtled toward 5 percent in recent weeks, representing a nearly one percentage point increase compared to the start of 2018.
After experiencing an unprecedented real estate renaissance for the last few years, the Philadelphia region is finally beginning to see housing prices slow. In both the second and third quarters of 2018, home values in the city appreciated 0 percent, meaning that the typical Philadelphia home is worth no more today than it was one year ago.
The housing market growth in values reflects, in part, a buyer population that is tired of competing for homes — especially in Philadelphia, which has been a red-hot market. After years of bidding wars and price increases, many have decided to wait on the sidelines until prices become more affordable.