Reventure Consulting: Zillow Officially Cuts Forecast. 242 Cities Heading for Housing Deflation

For the past two years, the housing market has been frozen. High mortgage rates have kept potential first-time buyers off the market. And it’s also kept existing homeowners from being willing to sell.

That’s starting to thaw. Mortgage rates have come down slightly. And more homeowners are willing to list their homes. However, there’s now a rising supply of homes, far in excess for demand at current rates.

The end result will likely mean a drop in home prices. That’s good news for potential buyers, as it increases affordability. However, existing homeowners will have to face lower prices. Since a home is often the largest source of wealth, that decline could prove uncomfortable.

It’s also a sign that the housing market’s thaw will still be a cool one for some time. However, it could still prove a profitable investment.

For instance, first-time homebuyers have several programs that can get them into a home with a low down payment. And some properties come with an assumable mortgage. That means buyers can assume the lower mortgage rates that existed a few years ago.

So while housing prices may finally see a notable drop, it could increase affordability. And first-time buyers may start to make up the biggest component of the real estate market once again.

To see the full breakdown on the real estate market, click here.