Written by Breck Hapner
Editor’s note: Welcome to the Haven U.S. State of the Housing Market series. Every month, we will share an update explaining details and projections related to the U.S. real estate sector to keep you informed.
The state of the U.S. housing market is definitely in flux, with higher home prices, mortgage rates, and a lack of inventory synergistically impacting affordability for many buyers.
Over the past 12 weeks, there have been fewer homes for sale compared to the same timeframe last year, which is radically different from the 50 to 60 percent gains from December 2022 through March 2023. Although housing inventory surged in the second half of 2022, the considerable decrease in 2023 inventory is mainly due to new listings falling year-over-year (YOY) for the past 62 consecutive weeks.
Much of the trouble is directly related to current mortgage rates. For example, a Mortgage News Daily report from September 13, 2023, stated that “the 30-year fixed mortgage rate increased to 7.27 percent last week and was 40 basis points higher than where it was in late July.” A Globe NewsWire press release from September 14, 2023, reported findings from the Freddie Mac Primary Mortgage Market Survey (PMMS), which showed that the “30-year fixed-rate mortgage averaged 7.18 percent as of September 14, 2023, up from last week, when it averaged 7.12 percent. A year ago at this time, the 30-year FRM averaged 6.02 percent.”
To further exacerbate these problems, Redfin said that “in August 2023 U.S. home prices were up 3 percent compared to last year, selling for a median price of $420,846.” In a report from September 14, 2023, Redfin said the U.S. median sale price is up by four percent from one year ago, and is only $10K below the record high that was set in June 2022.
A September 11, 2023, WMTV housing report reiterated that one of the main reasons home prices are not falling at the same rate we saw last year is the limited number of houses for sale in the U.S.