Decoding the Housing Market
Is another correction coming to the housing market? Even the most reliable sources can’t agree. At the beginning of this year, Redfin and Wells Fargo predicted 4 and 5.5 percent price drops respectively in 2023, while CoreLogic forecast a 3 percent increase and Zillow said prices would remain flat. At mid-year, all of those sources revised their estimates upward: Wells Fargo, CoreLogic, and Zillow now predict 1.6, 4.6, and 5 percent increases respectively in 2023.
What about 2024?
Here are a few data points to consider from Real Estate News.
•Sixty-one percent of U.S. homeowners have a mortgage rate below 4 percent, and 81 percent of all home mortgage rates are below 5 percent. With 30-year mortgages currently around 8 percent, homeowners have little incentive to sell. Expect inventory to remain tight through the first half of 2024, causing prices to notch upward.
• As the economy cools and Federal Reserve rate hikes begin to taper, mortgage rates should do the same. Expect mortgage rates to begin trending lower in the second half of 2023, and look for a more significant drop toward the five percent range in the second half of 2024.