Realtor, the real estate company, released the results of its mid-year update to its 2023 National Housing and Economic Forecast, which shows that the housing market will remain difficult in the United States for the rest of 2023.
“Mortgage rates have been revised modestly lower to reflect the sharp decline in late 2022 that carried through to 2023. Inflation is expected to cool only gradually. Mortgage rates will follow suit, with a gradual decline from mid-year that could bring rates closer to 6.0% by the end of the year”, says the forecast.
Realtor notes that home price growth continues to cool, and that affordability has led to a more substantial loss in demand, especially in the West. As a result, the house price forecast will have a modest decline of 0.6% for 2023 as a whole.
Home sales are still expected to decline, with a decrease of 15.8% by 2023. This would mean a total of approximately 4.2 million home sales for the year, the lowest annual total since 2012.
Realtor notes that higher costs have pushed households to be creative when navigating the housing market: “At the same time, fewer buyers have dampened competitiveness somewhat in many markets. As a result, down payments have decreased, creating an opportunity for buyers with more limited fundssuch as first-time buyers, who have been most challenged by the Hunger Games-like conditions of recent years.”
Other adaptations include look further afield to find affordability. Realtor’s cross-market demand report shows that the proportion of homebuyers looking for homes elsewhere than their current market continues to grow, especially in the Northeast, and off-market purchases remain high in the expensive West.
According to a recent survey conducted by Avail, a Realtor.com company, with high home prices and high mortgage rates, fewer renters are considering buying a home, and even those who are still planning to become homeowners report that they are delaying their home purchase and staying longer on the rental market. Consequently, the demand for rental properties is expected to remain strong during the second half of 2023.
Realtor.com Housing Indicators 2023 Forecasts:
· Mortgage rates: Average 6.4% throughout the year, 6.1% at the end of the year
Existing Home Median Sale Price Appreciation: –0.6%
Existing home sales: Down 15.8%, 4.2 million
· Inventory of existing homes for sale: down 5%
· For more detail on Realtor’s housing forecasts and their methodology, enter here.
Keep reading:
· Real Estate Market Myths Affecting Buyers and Sellers in the US Today.
· How far will it go? The price of housing in the US does not stop increasing
· Places homebuyers are moving to in the US.
