What’s up with the 2023 spring housing market? The spring 2023 housing market in the United States is not following the same pattern as in 2021 and 2022. The National Association of Realtors reported that total existing-home sales fell 2.4% from February to a seasonally adjusted annual rate of 4.44 million in March, with sales activity falling 22% year over year. This slowdown in demand is due to the increase in mortgage rates since late spring 2022.
However, inventory remains constrained because of a persistent housing shortage and fewer people putting their homes on the market after locking in a low interest rate during the pandemic. Despite the drop in demand, some markets are bucking the trend and seeing steep price increases in their listings. Smaller, historically more affordable markets such as Omaha, Nebraska, and Davenport, Iowa, have seen notable increases, with the median home listing price in Omaha increasing by 80% from a year prior.
Overall, experts predict that home prices will not fall precipitously due to the dearth of housing on the market. The NAR predicts that mortgage rates will fall to less than 6% by the end of the year, which will bring more buyers to the market, and home sales are expected to increase by 5% in the second quarter. However, there are fluctuations in the market, with rapid and unpredictable changes in mortgage rates affecting demand for houses on a weekly basis.
Some home prices continue to fall, especially in hot Sun Belt cities and gateway markets. This may indicate that some areas in Florida that were previously experiencing hot housing markets may now see a decline in home prices. Some, but not all. Hot spots near beaches and recreation should remain strong. TBBJ