Mortgage News March 15, 2023
Altos, a real estate data analytics firm, has reported that home-buying activity has remained surprisingly resilient during the first two months of 2023. Despite this, it is expected that there will not be enough demand to significantly impact the national housing market, which is predicted to remain flat or slightly decrease in value throughout the year. The pricing data for 2023 is still developing, but it indicates that home prices from 2022 are catching up quickly.
One factor contributing to the stability of home prices is the low inventory of homes for sale, which is limiting supply and propping up prices. Although rising mortgage rates are not having a significant effect on inventory, they are keeping prices lower and creating affordability issues for buyers.
The trend in home prices is a notable data point, with the median price of single-family homes in the US currently at $420,000, which is higher than in 2022 at this time. However, this gain was mostly made during March, April, and May of 2022. The dark red line in the pricing chart indicates that the market is approaching a price ceiling, with home prices likely to tick up slowly through June before peaking significantly below the peak price of June 2022.
The median price of new listings is $399,000, which is the same level as in 2022 at this time. The lack of year-over-year change in new listing prices implies no change in future sales prices. Pending sales, which are homes in contract but not yet closed, have a median price of $370,000, which is also unchanged from 2022. When these pending sales close, the prices are expected to be at or below 2022 sales prices. Thus, it is anticipated that home sales prices will be down year over year.
Although sales prices are a lagging indicator of the market, it is worth noting that the market is currently less scary than it was in 2022, but it is also slower than in recent years. The year-over-year lack of change in new listing prices is a significant data point for the year. While it is expected that sales price headlines will start reporting flat or down in a few months, it is more helpful to focus on what is happening in the market now.
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