Realtor.com Reports Sales and Prices in December Were Below Expectations
The market is facing challenges such as higher mortgage rates and tight supply.Despite this, prices are easing, with the median price of an existing home in December being $366,900, up 2.3% year-over-year.
Homes are also staying on the market longer, on average 26 days.All-cash Sales are rising, likely due to higher mortgage rates and a return of investors to the market as prices ease.
Sales of $1 million plus homes are down 45% year-over-year, while Sales at other price points are only down in the mid 30s.Realtor.com’s Chief Economist, Danielle Hale, states that the volatility in mortgage rates is in buyers’ favor, making pricing on homes more affordable for those taking on a mortgage.
Experts Predict Strong Real Estate Market in 2023
Additionally, there was a slight uptick in first-time home buyers in December, which suggests that some buyers are taking advantage of slightly lower mortgage rates as we move into the new year.
Overall, the market remains a sellers’ market.Despite the challenges facing the market, experts predict that the real estate market will continue to be strong in the coming year.The low-interest rate environment, coupled with pent-up demand from buyers who were unable to purchase during the pandemic, is expected to drive Sales in the first half of the year.
However, it’s important to note that the market conditions may vary depending on location and price point.Some regions may experience more of a slowdown due to rising prices, while others may see more Sales activity due to a better supply of affordable homes.
Another factor to consider is the potential impact of the Biden administration’s proposed policies on the housing market.
Sellers Market Improving, but Challenges Remain
The president has proposed a $15,000 first-time homebuyer tax credit, an expansion of the Homeowner Tax Credit, and a $100 billion investment in affordable housing.
While it’s unclear at this time how these proposals will be implemented, they could have a significant impact on the market in the long term.
In summary, while there are challenges facing the market, the existing home Sales numbers were better than expected, and experts predict that the market will continue to be strong in the coming year.
However, it’s important to keep in mind that market conditions may vary depending on location and price point and the potential impact of the Biden administration’s proposed policies.