Relief for Homebuyers in 2023?January 18th, 2023
Homebuyers across the country experienced some relief in December 2022 as the housing market continued to normalize.
So, will 2023 bring more relief to American buyers?
December saw the national median home list prices drop 11% from its peak last summer. Home prices were up just over 8% year-over-year in December 2022. However, this was the first single-digit price rise in a year, which is good news for buyers.
More Good News for Buyers in 2023?
More good news for buyers as the number of homes for sale across the country increased by over 50% from December 2021.
Buyers also aren’t feeling rushed to decide on a home because houses are staying on the market longer than previously. December 2022 saw a median day on the market of 67 days, allowing buyers to take their time home shopping.
Climbing interest rates were a significant reason for last year’s market cooldown, making it infeasible for many buyers to purchase a new home.
With mortgage rates declining from over 7%, many home shoppers can return to the market.
Danielle Hale, Realtor.com’s Chief Economist, states, “Prices are moderating. Mortgage rates came down. And there are more homes for sale. It’s a continuation of what we’ve been seeing.”
Price Increases are Down
The lower interest rates at the beginning of 2022 allowed buyers to purchase homes with high price tags. However, as we continued our journey into 2022, American’s faced sky-high rates, and home prices had stayed the same, with many would-be buyers quickly exiting the market – this resulted in over 13% of home sellers dropping their asking price.
Hale says, “Even though prices are coming down in some places, mortgage payments are still higher because mortgage rates have moved up so much over the last year.”
Inventory is Increasing – But Not Enough
Since the COVID-19 pandemic bidding wars, America’s housing inventory has been sparse. During the pandemic and for a short time afterward, homes often sat on the market for only hours before being snapped up.
Fortunately, that madness ended, allowing a healthier inventory of homes.
We saw 54% more homes on the market in December 2022 than a year before. And although that is promising news for Americans, it is still over 38% less than before the COVID-19 pandemic.
“It’s a big step in the right direction, but the market isn’t back to normal yet,” states Hale.
Moving Toward a Healthier Housing Market in 2023
As we begin to witness a more balanced market, this latest data shows we are stepping toward a healthy housing market.
Mortgage rates and home prices are beginning to decrease. Don’t hesitate to get in touch with us if you have questions about the San Diego housing market, are searching for a local real estate agent, or would like a free home valuation.
San Diego Housing Market Update