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The inventory of unsold existing homes declined for the second straight month to 1.25 million by the end of September, or the equivalent of 3.2 months' supply at the current monthly sales pace. It was the ninth straight month of falling sales as home prices remained elevated and a 30-year fixed mortgage rate hit a 20-year high pushing many buyers out of the market. The median existing-home price for all housing types was $379,100, up 6.6% from October 2021. Properties typically remained on the market for 21 days in October, up from 19 days in September.
Existing home sales in the US fell 1.5% to a seasonally adjusted annual rate of 4.71 million in September of 2022, the lowest since May 2020 and almost in line with expectations. It was the eighth consecutive monthly decline in sales as mortgage rates continued to rise and prices remain elevated making it impossible for many buyers to afford houses. On a regional basis, sales fell in the Northeast (-1.6%), Midwest (-1.7%) and South (-1.9%) and were unchanged in the West.
Realtor.com® 2023 Forecast for Key Housing Indicators
The 0.7% month-over-month price fall also reflects a decrease in homebuyer enthusiasm, with roughly three-quarters of states reporting declines since July. The states with the highest increases year over year were Florida (26.4%), Tennessee (20%), and North Carolina (19.9%). These large cities continued to experience price increases in August, with Miami on top at 27.1% followed by Phoenix at 17.8%, andLas Vegas also at 17.8% year over year. This long-term outlook is slightly lower than last month’s call for a 1.2% annual increase. Fannie Mae's Economic & Strategic Research Group provides analysis of current and historical data for the economy, housing and mortgage markets, and forecasts trends to help decision-makers anticipate opportunities and developments.
The median list price grew by 13.9% in September, a deceleration from recent highs. You won’t find these terms in an online calculator because they vary from loan to loan, but they are important for considering how affordable the payment will be for you over the life of your loan. Lenders are required to disclose this information, and shoppers thinking about taking on an adjustable rate mortgage should compare these amounts when shopping. October 2022 was the first time that inventory climbed back to its 2020 level for the same time of year. For homebuyers, the natural course was to seek affordability wherever they could find it.
Housing Market Predictions 2019: Tougher Road Ahead for Home Buyers and Sellers
Many people have been priced out of the housing market by rising rents and rising mortgage rates, which have risen from an average of just 3.2% at the beginning of the year to 5.81% by mid-June. Mortgage rates then topped 7 percent in the last week of October, the highest level in 20 years. This has resulted in a decrease in property sales since more individuals are unable to pay the present high costs. Theoretically, home prices should fall for the remainder of this year and into 2023. Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.
“This will be the first year since 2011 to see a decline for single-family starts,” said NAHB Chief Economist Robert Dietz. Housing supply will decrease in 2023 to maintain upward pressure on home prices as single-family homebuilding sees a decline next year. In October, the NAHB homebuilders group announced that homeowner confidence has dropped for the tenth consecutive month.
Realtor.com® Forecast for Key Housing Indicators
However, this growth in active inventory was primarily due to the typical home spending more time on the market than last year, as seller sentiment remained muted and fewer homes were listed compared to the previous year. Listing price growth remained within the double-digits but continued to moderate. The Top 10 housing markets for 2023 have also seen lower price increases in more recent months, which means they have experienced a relatively smaller affordability crunch than other markets. The Top 10 markets saw sale prices in the 12 months ending August 2022 grow by 10.5% on a year-over-year basis, compared to a growth rate of 12.6% for all 100 metros and a rate of 17.3% for the metros forecasted to slow the most in 2023. The latest housing market trends show that prices are rising in most parts of the country and most price segments because of the lack of supply. Economic activities are ramping up in all sectors, mortgage rates are rising, and jobs are also recovering.
These offers do not represent all available deposit, investment, loan or credit products. Rents will fall, and many Gen Zers and young millennials will continue renting indefinitely. Of the nine census divisions, the South Atlantic division recorded the strongest four-quarter appreciation, posting a 17.0 percent gain between the third quarters of 2021 and 2022. Since rental rates are still higher than they were before the outbreak, compromise and adaptability will be required well into next year.
Where Are Home Prices Increasing the Slowest?
Nationally, the inventory of homes actively for sale on a typical day in September increased by 26.9% over the past year. This amounted to 155,000 more homes actively for sale on a typical day in September compared to the previous year. The growth rate of inventory remained stable compared to last month’s growth rate of 26.9%.
This amounted to 240,000 more homes actively for sale on a typical day in November compared to the previous year. The growth rate of inventory increased compared to last month’s growth rate of 33.5%, when it had just surpassed 2020 levels, but inventory remains 38.1% below typical pre-pandemic 2017 to 2019 levels. The year-over-year growth rate increased by more than 13 percentage points over last month, the largest month-over-month increase in this growth rate since May 2022 when inventory first saw a positive growth compared to the previous year. 2022 was also predicted to be a prosperous year for the housing market but rising inflation and mortgage rates changed its outlook completely. Compared to the previous year, the housing market has significantly cooled, with home sales declining and prices rising at a moderate rate. In this blog post, we will discuss the latest housing market predictions for 2022 and the next twelve months.
In other words, while the majority (59%) of consumers agree that the current housing market favors home sellers, selling sentiment has greatly fallen from its June 2021 peak. These findings align with changing consumer expectations around price growth, as the net share of Americans who believe home prices will go up over the next 12 months decreased compared to last month. Active listing prices in the nation’s largest metros grew by an average of 10.2% compared to last year. Southern and Midwestern metros led the charge in active listing price growth, growing by 11.0% on average over the past year. Listing prices in the southern metros of Miami (+28.3%), and Memphis (+27.3%) grew the most among large metros, with Milwaukee (+27.0%) placing third. Western metros saw the greatest increase in the share of price reductions (+15.6 percentage points), followed by southern metros (+10.7 percentage points).
This is a noticeable increase from the less than 50% who searched across geographies pre-pandemic. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The Conventional MCAI decreased by 1.0 percent, while the Government MCAI remained unchanged.
There's a chance that half of the country may witness price increases, while the other half will see price drops. Nonetheless, the markets in California may be an outlier, with San Francisco perhaps seeing price decreases of 10-15%. In 2023, the foreclosure rate will be lower than ever before, accounting for less than one percent of all mortgages. The typical home spent 51 days on the market this October which is 6 days more than last year. Slower inventory turnover is primarily fueling the growth in actively listed homes but homes still spent 20 fewer days on the market this October than typical 2017 to 2019 timing.
For e.g; the millennials have aged into their prime homebuying years, and they are now the fastest-growing segment of home buyers. In 2018, millennial homeownership was at a record low but the situation has changed markedly. According to Realtor.com, 2023 could be a “nobody's-market” for buyers and sellers. There will be more homes for sale, homes will likely take longer to sell, and buyers will not encounter the intense competition that has been usual in recent years.
As mortgage rates have increased, prospective homeowners have submitted fewer loan applications. The prediction for existing home sales has shifted from positive growth of 6.6% to an annual fall of 6.7%. The positive outlook is that the firm does not predict a financial or foreclosure crisis on the scale of 2008, but they do expect housing fundamentals to return to the mean. Some of that moderation will be brought about by growing salaries, while some will be brought about by declining home prices. There are mixed signals from economists about if and when the housing market will crash, or if it will simply “correct” itself from the double-digit percentage jumps seen in home prices the past year.
According to the forecast, sales activity is expected to slow down slightly in 2022 and increase again in 2023. The quarterly housing outlook pulse poll conducted by Freddie Mac assesses public attitudes on housing-related problems. Since the beginning of the epidemic, market confidence has reached its lowest point in the second quarter of 2022. In addition, as a result of the impact of growing inflation on the cost of living, they found an increase in housing payment difficulties, particularly among renters.
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