Pitch: "US Housing Prices to Rise Up to 3% Next Year"

"Fed, Forecasts 75bp Rate Cut Next Year"

The U.S. Federal Reserve (Fed) has signaled an interest rate cut next year, leading to forecasts that U.S. housing prices may rise further.

According to foreign media including Business Insider on the 25th (local time), global credit rating agency Fitch expects the Fed to cut rates by 75 basis points (1bp = 0.01 percentage points) next year, projecting that this could further stimulate the housing market amid already overvalued U.S. home prices.

Fitch predicts that U.S. housing prices will increase by up to 3% next year and rise by 2-4% in 2025. According to Fitch, as of the second quarter of this year, 88% of major U.S. metropolitan areas had overvalued housing prices, up from 73% in the first quarter of last year. Housing prices were overvalued by 7.8% compared to their fair value at the end of 2022, but this overvaluation grew to 9.4% in the second quarter of this year, indicating an expanding bubble.

Fitch stated, "This will act as a limiting factor for first-time homebuyers." However, it is expected that the upward trend will slow compared to this year, when housing prices reached record highs due to supply shortages.

On the other hand, some forecasts predict that U.S. housing prices will decline next year. U.S. housing information company Realtor.com forecasts a 1.7% drop in housing prices next year, reasoning that as mortgage rates are expected to fall further, homebuyers will not rush to purchase.

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