National Real Estate Insights
The National real estate market continued its recovery in the first half of 2023, rebounding dramatically from the slowdown in activity and decline in prices which hit bottom in late 2022. On the macroeconomic front, despite intermittent financial crises, indicators have generally turned distinctly positive: Substantial recoveries in stock markets, a major decline in inflation, strong employment reports, and consumer confidence hitting its best reading since September 2021. Interest rates remain relatively high, commonly ranging between 6% and 7% this year, but to a large degree, it appears buyers have accepted these rates as the new normal – and a larger proportion of buyers have been paying all-cash.
Buyer demand continued to climb through spring, but sales have been constrained by the steep decline in new listings coming on market over the past 12 months, a decline generally ascribed to the “mortgage lock-in effect,” i.e. a reluctance of homeowners with low interest rate mortgages to sell and move. This has put upward pressure on home prices, as well as accelerating new home construction as developers seek to take advantage of low-inventory conditions.
Ultimately, the market is defined by the balance between demand and supply, and, in 2023, it has tilted increasingly to sellers’ advantage, with homes selling faster, with more offers, for higher prices. Part of this is due to seasonal dynamics – spring is commonly the most active selling season of the year – but the change also reflects a rebound in psychology, with many buyers clearly deciding to move forward with their life plans.
A national report is necessarily a huge generalization of broad trends across an enormous range of regional submarkets, whose values and market dynamics vary. How the data illustrated here applies to a particular home is unknown without a specific comparative market analysis.