Our Market Report is a comprehensive walkthrough of the most up-to-date information regarding the real estate market.
Have Home Values Hit Bottom?
Whether you’re already a homeowner or you’re looking to become one, the recent headlines about home prices may leave you with more questions than answers. News stories are talking about home prices falling, and that’s raising concerns about a repeat of what happened to prices in the crash in 2008.
One of the questions that’s on many minds, based on those headlines, is: how much will home prices decline? But what you may not realize is expert forecasters aren’t calling for a free fall in prices. In fact, if you look at the latest data, there’s a case to be made that the biggest portion of month-over-month price depreciation nationally may already behind us – and even those numbers weren’t significant declines on the national level. Instead of how far will they drop, the question becomes: have home values hit bottom?
Think Twice Before Waiting for 3% Mortgage Rates
Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.
Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Mac, shares:
What Are Your Goals in the Housing Market This Year?
If buying or selling a home is part of your dreams for 2023, it’s essential for you to understand today’s housing market, define your goals, and work with industry experts to bring your homeownership vision for the new year into focus.
In the last year, high inflation had a big impact on the economy, the housing market, and likely on your wallet too. That’s why it’s critical to have a clear understanding of not just the market today, but also what you want out of it when you buy or sell a home. Danielle Hale, Chief Economist at realtor.com, explains:
Planning To Sell Your House? It’s Critical To Hire a Pro
With higher mortgage rates and moderating buyer demand, conditions in the housing market are different today. And if you’re thinking of selling your house, it’s important to understand how the market has changed and what that means for you. The best way to make sure you’re in the know is to work with a trusted housing market expert.
Here are five reasons working with a professional can ensure you’ll get the most out of your sale:
You May Have More Negotiation Power When You Buy a Home Today
Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper competitive market has cooled this year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers.
And with less competition comes more opportunity. Here are two trends that may be the news you need to reenter the market:
Mortgage Rates Are Dropping. What Does That Mean for You?
Mortgage rates have been a hot topic in the housing market over the past 12 months. Compared to the beginning of 2022, rates have risen dramatically. Now they’re dropping, and that has to do with everything happening in the economy.
Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains it well by saying:
What’s Going on with Home Prices? Ask a Professional
If you’re thinking about buying or selling a home this year, you may have questions about what’s happening with home prices today as the market cools. In the simplest sense, nationally, experts don’t expect prices to come crashing down, but the level of home price moderation will depend on factors like supply and demand in each local market.
That means, moving forward, home price appreciation will continue to vary by location, with more significant changes happening in overheated areas. Here’s a quick snapshot of what the experts are saying:
Key Advantages of Buying a Home Today
There’s no doubt buying a home today is different than it was over the past couple of years, and the shift in the market has led to advantages for buyers today. Right now, there are specific reasons that make this housing market attractive for those who’ve thought about buying but have sidelined their search due to rising mortgage rates.
Buying a home in any market is a personal decision, and the best way to make that decision is to educate yourself on the facts, not following sensationalized headlines in the news today. The reality is, headlines do more to terrify people thinking about buying a home than they do to clarify what’s actually going on with real estate.
Here are three reasons potential homebuyers should consider buying a home today.
What Buyers Need To Know About the Inventory of Homes Available for Sale
If you’re thinking about buying a home, you’re likely trying to juggle your needs, current mortgage rates, home prices, your schedule, and more to try to decide if you want to jump into the market.
If this sounds like you, here’s one key factor that could help you with your decision: there are more homes for sale today than there were at this time last year. According to Calculated Risk, for the week ending in November 18th, there were 47.7% more homes available for sale than there were at the same time in 2021. And having more options for your home search may be exactly what you need to feel confident about making a move.
Here’s a look at where the increased housing supply is coming from so you can get a better sense of what’s happening in the market today and what it means for you.
What Caused the Growth in Housing Inventory This Year?
The increase we’ve seen in housing supply this year isn’t from the source you think it is. Rather than an influx of recent homeowners listing their houses for sale (known as new listings), the primary reason the supply has grown is because homes are staying on the market a bit longer (known as active listings).
That’s happening because higher mortgage rates and home prices have helped moderate the peak frenzy of buyer demand, which has slowed down the pace of sales. And, as the pace of sales has eased, inventory has grown as a result.
The graph below uses data from realtor.com to show that it’s active listings, not new listings, that have driven the growth we’ve seen over the past few months:
And while overall inventory gains may slow down this winter due to typical housing market seasonality, you still have a chance to capitalize on the current supply.
What This Means for Your Home Search
Regardless of the source, the increase in available housing supply is good for buyers. More homes available for sale means you have more options to choose from as you search for your next home, and you may even have more time to consider them.
So, if you tried to buy a home last year and lost out in a bidding war or just couldn’t find something you liked, this may be the news you’ve been waiting for. If you start your search today, those additional options should make it less difficult to find a home you love, especially as some other buyers pause their search this holiday season.
Just remember, housing supply is still low overall, so it won’t suddenly be easy – it’ll just be less challenging than it was at this time last year. As a recent article from realtor.com says:
“Despite this improvement in the number of homes actively for sale, active listings still lag their pre-pandemic levels.”
The increase in housing supply helps put you in a great position to kick off the new year in your dream home. And who better to help you find it than a trusted, local real estate professional?
Bottom Line
If you’re ready to jump into the housing market and see what’s available in our local area, let’s connect.