The price of homes fell year-over-year in February 2023, for the first time in nearly 11 years and the total number of home sales saw their largest monthly percentage increase since July 2020.
Many economists have mixed opinions on how much more home prices will drop this year.
“However, some promising trends are developing. According to the National Association of Realtors (NAR), the median existing-home sales price was down 0.2% to $363,000 in February compared to a year ago. This ended a record streak of 131 consecutive months of year-over-year increases. Total existing-home sales jumped almost 15% from January to February—ending a 12 consecutive month streak of declining sales—but were still down nearly 23% from a year ago, per the NAR.” – Robin Rothstein, Forbes Advisor Staff
According to the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD), the development of new homes also increased by just under 10% in February, helping to provide much-needed inventory. Meanwhile, mortgage rates, have proven to be unpredictable lately. Following a year-to-date peak in early March, rates fell for five consecutive weeks before starting to slowly increase again in April.
Despite the latest upward trend, recent rate declines seem to have influenced some shoppers off the sidelines. As home price growth slows down and sales transactions increase, some experts remain cautiously optimistic the housing market is in a recovery. “I think we’re more likely to see the market cool, rather than crash,” says Rick Sharga, executive vice president of market intelligence at ATTOM Data.
Typically, in a housing market crash you will see the following:
- A decline in home sales
- A 20-30% decrease in the price of homes
- An increase in foreclosures
These factors are far more than what’s currently happening.
Needless to say, attempting to predict what might happen with the housing market this year is not the best home-buying strategy. “Buyers sitting on the sidelines today in anticipation of lower prices tomorrow may end up disappointed,” says Neda Navab, president of the U.S. region at Compass, a real estate tech company.
We suggest starting with a mortgage calculator to estimate your monthly housing costs based on your down payment and interest rate. If you are unsure or have questions regarding what’s currently available on the market, contact our realtors at Greene Realty today!