The 2023 housing market is off to a vigorous start. The median price of newly listed homes is climbing, price reductions are continuing to fall, and inventory continues to remain low.
Earlier this month inventory did rise slightly to 473,000 single-family homes but “there are no signs in the data that a flood of new inventory is coming. We still have 36% fewer homes available now than we did at the start of the pandemic,” reported Mike Simonsen, CEO of Altos Research. Watch the full video here.
Meanwhile, the 30-year fixed-rate mortgage averaged 6.15% in the week ending January 19, down from 6.33% the week before, according to Freddie Mac. One year ago, the 30-year fixed rate was 3.56%.
“Rates are at their lowest level since September of last year, boosting both homebuyer demand and home builder sentiment. Declining rates are providing a much-needed boost to the housing market, but the supply of homes remains a persistent concern,” said Sam Khater, Freddie Mac’s chief economist.
Bob Broeksmit, Mortgage Bankers Association (MBA) president and CEO, said the trade group “expects mortgage rates to continue lowering over the course of the year”, which should continue bringing more homebuyers back into the market.
Despite mortgage rates lowering, affordability will continue to be a challenge in 2023 but there are signs of hope.
“Consumer price growth cooled to a 6.5% annual increase last month, down from the 9.1% year-over-year growth reported in June, according to Thursday’s report from the U.S. Bureau of Labor Statistics. Prices declined by 0.1% from November to December. It’s a development that could improve the odds of mortgage rates eventually falling below 6 percent once again,” said Lawrence Yun of NAR.
“The gate is beginning to open for homebuyers who got shut out in October and November when the rates went above 7%,” said Yun. “However, there is still a housing shortage and not enough listings.”
Take a look at the second week of January’s inventory tracker report.
In other news, the United States Department of Housing and Urban Development (HUD) announced a new process that will allow people seeking FHA financing to request a review of their property appraisal if they believe the results may have been skewed by racial bias. This means a homeowner refinancing their home with an FHA-insured mortgage will be able to take steps to ensure that their appraisal is fair.
Finally, David Brook of eXp Realty says, steadying interest rates, motivated sellers, and leveraging buydown mortgages are the three variables that will influence 2023’s housing market. Read the article here.