TGFLIP MARKETING AGENCY
April 24, 2023
Home Sales Prices and Inventory
Housing Starts and Builder Confidence
Mortgage Rates and Homebuyers
The real estate industry has seen significant changes in recent years, and 2023 is no different.
As the spring homebuying season approaches, economists and housing specialists are looking for indications of a revival. While some favorable trends are appearing, others are more cautious, keeping inflation, interest rates, and geopolitical instability in mind.
In this blog, we will provide a detailed forecast of what the real estate sector may undergo in the coming months of 2023.
2. Home Sales Prices and Inventory
According to the National Association of Realtors (NAR), the average selling price for existing houses fell 0.2% in February to $363,000 from the previous year.
This is the first drop in 11 years, bringing a stop to a historic sequence of year-over-year growth. While this may be excellent news for buyers, the inventory of available houses remains low, which helps to keep demand and prices high.
Unsold inventory has a 2.6-month supply at the current sales rate, which is short by historical standards but up from 1.7 months a year ago.
Several houses are seeing multiple bids, and inventory levels are still at record lows. Low inventory levels, according to Lawrence Yun, chief economist at NAR, will keep hampering the housing market through 2023.
3. Housing Starts and Builder Confidence:
According to the US Census Bureau and the US Department of Housing and Urban Development, single-family construction starts jumped 9.8% in February while building permit applications climbed 13.8% over the previous month.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose two points in the most recent builder outlook report.
Even still, builder confidence remains low, so additional successive upticks are required before we see a meaningful revival in the building.
Furthermore, the Federal Reserve's continued federal funds rate raises may be adding to the gloomy forecast for home starts.
4. Mortgage Rates and Homebuyers:
According to Freddie Mac, mortgage rates have fallen in recent weeks, falling to 6.32% for the week ending March 30.
This falling rate appears to be attracting some customers back into the market, as the Mortgage Bankers Association reported that application activity surged as mortgage rates fell for the third week in a row.
Yet, many analysts are divided on how much further home prices would fall this year, given the country's low housing supply.
While falling property prices and higher sales volumes are encouraging, homebuyers, particularly first-time buyers, continue to face financial issues.
As we pass through 2023, the real estate market keeps sending out contradictory signals. While there are some encouraging indicators, such as lower mortgage rates and increasing sales activity, there are still considerable obstacles to overcome.
One of the most significant difficulties is the continuous limited inventory of available houses, which keeps demand high and prices high. As a result, many first-time homeowners have found it difficult to enter the market.
Additionally, while home starts and builder confidence have improved, the outlook remains cautious due to continuous Fed funds rate rises and geopolitical uncertainties.
Nevertheless, the 2023 real estate market is still undergoing substantial adjustments and problems.
It remains to be seen if the housing market has fully recovered or if there are still barriers to overcome. Buyers and sellers can navigate the market and make educated judgments by keeping an eye on trends and remaining informed.
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The information provided is not intended to be a source of advice or credit analysis with respect to the material presented, and the information and/or documents contained on this website do not constitute investment advice. The ROI varies from case to case, and TGFLIP Marketing Agency would not be responsible for any loss carried out regarding this information.
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