- SUMMARY
The housing market continues to face challenges, with high interest rates, affordability concerns, and a recent slowdown in sales due to the Easter holiday.
However, some indicators suggest that there could be a path toward balance in the future.
Mortgage rates have reached 7%, and mortgage purchase applications have dropped significantly.
In fact, applications are at their lowest levels since 1997.
Demand for housing is down, with sales transactions of existing homes on pace to reach a slightly under 4 million mark, a level last seen during the Great Financial Crisis (GFC).
Despite the lack of demand, inventory is slowly increasing.
New listings surged in several metro areas, including San Jose, Phoenix, and Sacramento.
Experts believe that sustained inventory growth could lead to a decline in prices.
Some areas have already experienced price declines.
Jackson, Mississippi, saw a drop of 37.5% year-over-year, while Birmingham, Alabama, fell by 7.5%.
Myrtle Beach, South Carolina, and Boise, Idaho, are also showing signs of downward price trends.
However, it’s important to note that these declines are not widespread and that many metro areas are still experiencing price increases.
Year-over-year, West Palm Beach had a median sales price increase of 19.1%, followed by Anaheim (18%) and San Jose (15.9%).
Active listings reached a four-year high for this period, with over 900,000 homes available for sale.
This increase in inventory could put downward pressure on prices, but experts believe that prices will not decline until June or July.
Despite the challenges, there are signs that the housing market may be stabilizing.
New home sales have seen some price declines, and pending sales are down.
Active listings of homes with price cuts have hit record highs, which suggests that sellers are becoming more realistic about their asking prices.
Home-buying demand remains low, and experts anticipate that it will stay low this year.
High interest rates and quantitative tightening policies by the Federal Reserve are suppressing demand.
Overall, the housing market is in a fragile state.
A surge in inventory could lead to further price declines, but it’s too early to say if prices will crash.
Experts advise homebuyers to use data and simple math to determine whether they are getting a good deal and to be prepared to make adjustments as the market continues to evolve.
- Key Takeaways
The housing market is showing signs of stabilization.
New home sales have seen some price declines, pending sales are down, and active listings of homes with price cuts have hit record highs.
This suggests that sellers are becoming more realistic about their asking prices.
Mortgage rates are at their highest levels since 2002.
Mortgage rates have reached 7%, and mortgage purchase applications have dropped significantly.
In fact, applications are at their lowest levels since 1997.
The lack of demand for housing is leading to a slowdown in sales.
Demand for housing is down, with sales transactions of existing homes on pace to reach a slightly under 4 million mark, a level last seen during the Great Financial Crisis (GFC).