Three forecasts for the housing market during April

 

Three forecasts for the housing market during April

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Whether you are buying or selling, these are good things to know.

Many people struggle to buy a home, and for a good reason. In the past year, mortgage rates have started to rise sharply. That alone is hard enough. But housing prices have also gone up. So, buyers have had many problems with affordability.

Housing market conditions can change from month to month. And April can be an interesting month in real estate, as real estate listings tend to go up in spring.

But we can only expect a small jump in inventory in April. This is what the potential housing market looks like.

1. Mortgage rates are likely to remain high

At the start of 2023, mortgage rates are falling, causing home sales to increase. Case in point: Existing home sales rose 14.5% in February compared to January, according to the National Association of Realtors (NAR).

But mortgage rates are likely to remain high in April. They may drop a bit, but it's fair to assume they won't drop below 6% anytime soon. And they may be creeping towards the 7% mark.

2. The housing stock may increase modestly

Spring is the time for homes to come to market - in a regular call. In the past few years, we've had nothing but.

Even if real estate stocks rise slightly in April, buyers only have many options. As of the end of February, only 980,000 existing homes were left unsold, according to the NAR. That's just a 2.6-month supply. And for context, it usually takes a minimum of 4 months for supply to balance out in the housing market.

Of course, limited housing stock is great for sellers. The less competition, the easier it is to charge higher prices.

But home sellers need to realize that because mortgage rates are so high these days, buyer demand is different than what it was a year ago or in 2021. So sellers must be willing to make some concessions, even as inventory runs low.

3. Home prices will remain high

In February, the median existing home sale price fell to $363,000 per NAR. This is a decrease of 0.2% from the previous year. But it's also not a noticeable decrease.

If the home stock rises more than expected in April, home prices may decline more moderately. But buyers shouldn't expect a 5% drop in home prices. A 1% drop, at this point, would be significant given the way home prices have headed over the past year.

Should you buy or sell a home in April?

Unfortunately, April is shaping up to be a difficult month for homebuyers. Those looking to sell a home may have more success, especially if they sign up early before competition increases.

However, buyers should take comfort in the fact that home prices are starting to fall. If inventory jumps in April, it could pave the way for more reasonable prices in May. And if mortgage rates decline at that point, it could help address the affordability crisis plaguing buyers for months.