What will the housing market look like by the end of spring 2023?

What will the housing market look like by the end of spring 2023 according to experts?

When it comes to real estate, timing is everything. If you've been waiting to buy or sell a home, you're probably anxiously waiting to see what the market will look like by the end of spring.

In March 2023, existing home sales were down 22% from a year ago, according to the National Association of Realtors. Additionally, the median home sale price decreased by 0.9% from 2022.

Notably, according to NAR, the inventory of unsold existing homes increased by 1% as of February 2023. This equals 2.6 months of inventory supply at the current monthly sales rate.

While conditions currently look promising for buyers, it is never wise to get comfortable in today's volatile market. To help you better understand what to expect by the end of spring, GOBankingRates spoke with two real estate experts to get their projections.

There's no way to know what the market will achieve by the end of this season, but here's their prediction.

Home prices will see "reasonable reductions."

"Overall, home prices are trending lower, although this is not an indication of a contraction in value," said Rick Arvelo, co-founder, and CEO of New American Funding, the largest privately held Latina-owned mortgage company in the United States. Unprecedented levels in house prices over the past two years, we are seeing churn coming out of some of the markets that have seen house prices skyrocket."

However, he noted that this is market-specific, so that price drops will vary across the country.

"For the most part, reasonable cuts trend as we enter spring, a historically busy real estate season," he said.

Mortgage Rate Predictions 2023: When Will Rates Fall?

It will still be a buyers' market.

"Because of the current housing shortage, spring would be an excellent time to consider buying," Arvelo said. "In 2021 and early last year, we saw several offers that drove up home prices and bankrolled losing money buyers."

During this period, he said, it wasn't uncommon for buyers to lose multiple bids, leading them to bid more than the price required to win a deal.

"The market changed last year, and buyers are now in the driver's seat and negotiating price cuts," he said. "Once rates reach the 5% range again, you will likely see a shift back to the seller market."

Thus, he said that buying now can help you get a better deal.

"When rates drop in the future, which is to be expected, homeowners can refinance at a lower rate," he said.

If prices fall, home prices may rise again.

Historically, Arvielo said homebuyers are most active in the spring through early-mid fall, with a slight dip during the summer months, when people are on vacation.

"After that, the holidays and cold conditions in most parts of the country slow activity," he said. "This year and last, interest rates played a major role in the slowdown in housing transactions, which drove up demand."

This could cause an increase in activity this spring, he said, depending on interest rates.

"If rates go down, we will likely see an increase in activity," he said. "And when combined with the historically low inventory, we could see home prices rise again."

New home sales will outpace existing home sales.

New home sales will rise to 680,000 units by the end of spring, said Albert Lord, founder, and CEO of Lexerd Capital Management, well above the average of 620,000 units over the past three months.

"Existing home sales will be on a downward path, expected to come in at 4.3 million in June, down from 4.44 million in January," he said.

Housing prices will mostly stay the same.

"Prices will remain stable with some increases in urban areas with limited supply," Lord said.

He said the median sales price in the United States was $515,000 in March, down from $552,000 in December 2022. By the end of spring, prices are expected to approach $510,000.

"The rental market may face challenges, as rates have averaged $1,625 per month, and the prospect of easing business conditions will affect the rate of rental growth," he said.

The real estate market as a whole will remain moderate

"30-year fixed mortgage rates will continue to be high — around 6.5% — compared to 6.7% [in] December 2022," Lord said. "With the Consumer Confidence Index falling to 103 in May, from 106 in January, we expect the real estate market to show moderate conditions."

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