The past few months brought about a turnaround in the housing market, with higher mortgage rates halting home sales since the summer. For homebuyers, the road ahead creates anxiety and uncertainty. But the outlook for the coming year may offer some reprieve and new opportunities according to the Close.
Here are some facts that Buyers should keep in mind as they get ready to head into the home search in 2023.
1. In today’s market, homebuyers searched an average of 10 weeks for a home. That’s an increase from eight weeks during 2020 and 2021, an indication that the market is cooling slightly, giving homebuyers a better shot at getting into a home they love.
2. As of October 2022, active inventory continued to grow, increasing 36% above one year ago, a clear indication that homes are staying on the market longer.
3. April is the most competitive month of the year for homebuyers. According to Realtor.com, there is a 29% surge of listings during April, and homes typically sell for higher during that month, as well.
4. According to a Realtor.com seller survey, 67% of homeowners who sold in August 2022 negotiated with buyers who wanted repairs done (in comparison with 31% in the previous six to 12 months).
5. A record 29% of single-family homes for sale in the third quarter were newly constructed, climbing from 25% in the same period last year and 18% in 2020.
6. In September 2022, the number of completed new homes for sale was up 19% from the prior month.
7. A strong rebound is projected for housing in 2024, with a 10% jump in home sales and a 5% increase in the national median home price.
1. In 2022, homebuyers typically purchased their homes for 100% of the asking price, with 28% purchasing for more than the asking price.
2. The median home price in 2022 is $357,300. That’s a $46,700 increase from January 2021 to January 2022 but it is changing.
3. As of August, the Case-Shiller Index showed U.S. home prices had fallen 1.3% from their June 2022 peak.
4. Researchers at Goldman Sachs expect U.S. home prices to decline between 5% and 10%, with their official forecast model predicting a 7.6% drop.
5. Ohio is the most affordable state based on the cost of living and housing affordability. Oklahoma comes in second-most affordable, while the least affordable states are Oregon, Alaska, Massachusetts, California, and Hawaii.
1. Mortgage rates are expected to keep rising, albeit slowly, after new indicators showed that inflation rose 7.7% year-over-year in October, according to a Bureau of Labor Statistics report.
2. Median monthly mortgage payments are now about 81% higher than they were a year ago, according to a Realtor.com® analysis.
3. For potential buyers, the increase in mortgage rates to 7%-plus means the monthly payment on a median-priced home, with a 20% down payment, is now close to $1,000 higher than in January 2022.
4. Among homebuyers aged 23 to 41, the most common reason for a mortgage denial was an insufficient debt-to-income (DTI) ratio, followed by a low credit score.
1. Twenty-nine percent of first-time homebuyers cite “saving for a down payment” as the most challenging part of the homebuying process.
2. Since 2018, the average down payment for first-time homebuyers has consistently ranged between 6% and 7 percent.
3. In 2021, 28% of first-time homebuyers used a gift or loan from family or friends toward their down payment.
If you have questions about the real estate market in Bethesda, DC, or the greater DC Metro area, just give us a call at 240-401-5577 or email us at firstname.lastname@example.org. The Lise Howe Group is here to answer all your real estate questions!