The real estate market has been showing promising signs of recovery, as mortgage rates continue to decline, and home sales data indicates a resurgence in buyers. The month of February saw home sales prices fall year-over-year for the first time in almost 11 years, and total home sales had their largest monthly percentage increase since July 2020. While this is good news for those looking to purchase a home, many economists remain skeptical about how much more home prices will drop in 2023.
One of the primary factors impacting the housing market is the limited housing supply across the nation. Homeowners who bought houses in recent years at record-low interest rates are opting to stay put, which has contributed to a tight inventory. This inventory shortage, in turn, is keeping prices from dropping off further, perpetuating affordability challenges for many prospective homebuyers, especially first-timers.
Although home prices are still high year-over-year, they are not as sky-high as they were in early 2022. However, the extent to which home prices will dip further this year will depend largely on the direction of mortgage rates. If mortgage rates continue to decline, we may see further price drops, making homeownership more accessible to a broader range of individuals. Conversely, if mortgage rates rise, it may drive up home prices once again, presenting further obstacles to potential buyers.
All in all, the current state of the housing market presents a mixed bag of opportunities and challenges. Lower mortgage rates and increased home sales may be good news for those looking to purchase a home, but tight inventory and high prices still pose significant obstacles. As we look to the future, it remains to be seen how the market will evolve and how buyers and sellers will adapt to the ever-changing landscape.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Very Vintage Vegas does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Very Vintage Vegas, will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.