Experts Forecast a Turnaround in the Housing Market in 2023
The housing market has gone through a lot of change recently, and much of that was a result of how quickly mortgage rates rose last year. On average rates moved from around 3.5% for a 30 year fixed mortgage in February of 2022 to near 7.02% in October 2022, and have come down and settled to around 5.89 to 6.25% depending on the loan program, credit score and down payment over the last 30 days.
Now, as we move through 2023, there are signs things are finally going to turn around. Home price appreciation is slowing from the recent frenzy, mortgage rates are coming down, inflation is easing, and overall market activity is starting to pick up. All of that’s great news for the housing market this year.
In Las Vegas, we saw our inventory of homes for sale move from about 2,500 homes on the market in February 2022 to over 11,000 homes listed for sale in November of 2022 and it's now settled and moved back down to about 7,200 homes listed for sale on the market in February 2023 as demand returns and sales pick up again.
On the demand side of the equation in Las Vegas, there were about 4,200 monthly home sales in February of 2022, which slowed to about 2,500 homes sales in October of 2022, however there are currently (as of February 11th, 2023) 3,360 properties under contract.
Here’s what experts are saying...
Cristian deRitis, Deputy Chief Economist, Moody’s Analytics:
“The current state of the housing market is that it is certainly in transition.”
Susan Wachter, Professor of Real Estate and Finance, University of Pennsylvania’s Wharton School:
“Housing is going to ease up. I think 2023 will be a turnaround year.”
Lawrence Yun, Chief Economist, National Association of Realtors (NAR):
“Mortgage rates have fallen in the recent past weeks, so I’m very hopeful that the worst in home sales is probably coming to an end.”
Robert Dietz, Chief Economist and Senior Vice President, National Association of Home Builders (NAHB):
“. . . it appears a turning point for housing lies ahead. In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability.”
The Mullin Message
If you’re thinking about making a move this year, this turnaround in the housing market could be exactly the window you’ve been waiting for to execute on that change. Increased sales activity is giving sellers a window to unlock that equity growth they've experienced and providing more purchasing power. Meanwhile, on the purchasing side of the equation, interest rates have settled and with more inventory on the market sellers are more likely to negotiate concessions that could help you move your interest rate and purchase price down even further. Let's connect and discuss your long term housing goals and see what kind of opportunities there are for you or if it's best for you to just sit this cycle out.