Step Inside The Market - Week 26, 2023

StepInside Weekly 6/29

Greetings everyone!

In this week’s recap, we will focus on the current trends within the residential real estate market and predictions for the housing market for the rest of 2023!

Over the last week, the average contract interest rate for a 30 year fixed mortgage increased to 6.75% from 6.73%

However, even though rates did increase, Purchase & Refinance applications rose by 3% over the previous week, while still being down by 21% and 32% respectively.

A potential factor in the rising Purchase applications could be that home prices fell by 0.2% based on the latest S&P CoreLogic Case-Shiller National Home Index report.

• Note that the many cities in the West coast and South continue to see price declines while the cities East Coast and Midwest do not see the same declines.

New-build homes are becoming the star for the purchase market, with sales for these units up 12% in April and a staggering 20% in May!

The most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) that tracks builder sentiment jumped from 45 to 50. Anything at or above 50 shows strong confidence!

We encourage our readers to look at this great overview from Forbes Advisors on some of the pros and cons for the market through year end! Some key takeaways are:

• Although overall housing inventory has not recovered from 2008, buyers are flocking to new builds in 2023 – just like we mentioned above!

• The overall housing market will likely continue to be down through year end due to high inflation, low inventory and likely continued Fed Rate hikes.

🔥 The CEO of Compass, a leading Real Estate Brokerage firm, predicts that if rates fall to the 5% range, the overall housing market is likely to be flooded by those who are looking to sell!

We tend to agree with this thinking, as the current rate environment continues to be the main blocker for many looking to sell or purchase new homes!

Leave a comment or share your opinions with us on this article! We love to hear from other professionals.