The housing market has gone through a ton of changes lately, mostly because of how fast mortgage rates shot up last year. But now, as we head into 2023, things are finally looking up. Home prices are starting to calm down from the crazy increases we’ve seen recently, mortgage rates are going down, inflation is easing, and the whole market is starting to pick up. Here’s what the experts are saying.
Current data shows today’s market is nothing like it was before the housing crash in 2008. Bill McBride, Founder of Calculated Risk, explains that foreclosure volume has declined a lot since the crash:
“The bottom line is there will be an increase in foreclosures over the next year (from record level lows), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”
The Supply of Houses for Sale Today Is Limited
To give you some background, during the 2008 housing crisis, there were way too many houses up for sale, including lots of short sales and foreclosures, which caused prices to plummet. Although the supply of houses has gone up since the start of this year, there’s still not enough inventory available overall, mainly because there haven’t been enough new houses built over the years.
According to the latest Monthly Housing Market Trends Report from realtor.com:
“There were 65.5% more [houses] for sale in January compared to the same time in 2022. This means that there were 248,000 more houses available to buy this past month compared to one year ago. While the number of houses for sale is increasing, it is still 43.2% lower than it was before the pandemic in 2017 to 2019. This means that there are still fewer houses available to buy on a typical day than there were a few years ago.”
House Buyers are Edging Back into the Spring Market
Fewer properties for sale means buyers have fewer choices than they did prior to the pandemic—and that frustration is leading some to give up on the buying process altogether. However, mortgage rates are lower than their peak last fall, encouraging more buyers to participate if they can find properties.
The housing market faces a significant challenge with a shortage of available houses compared to the number of interested buyers, likely for years to come. To meet the demand, the market needs more houses for sale.
If you’re looking to capitalize on a favorable position in the market, this spring may present an opportunity for you.
Sources: Realtor.com, Keeping Current Matters & ATTOM Data
