– Home prices in the U.S. held up in 2023, but sales volume in the housing market declined
– Consumers care about home prices and mortgage rates, while the industry cares about transaction volume
– The housing market is currently in a deep recession, but if mortgage rates improve, it may be at the bottom of the recession
– Lack of affordable housing may lead to a continued decline in the number of people buying homes
– Housing inventory continues to build, with 567,000 single-family homes on the market
– There are 62,000 new listings this week, with 9,000 already under contract
– Transaction volume is no longer decreasing year over year
– 39.2% of homes on the market have had a price cut, indicating a more stabilized market compared to the fourth quarter of 2022
– Home prices remain strong, 2% above last year, with a median price of $430,000 for single-family homes.
While home prices in the U.S. held up in 2023, sales volume in the housing market cratered. Consumers care about home prices and mortgage rates; the industry cares about transaction volume.
The industry is in a deep housing recession this year. If we get lucky with mortgage rates, though, we might just be at the bottom of the housing market recession right now. Or does a continued lack of affordable housing mean are we in for a continued decline in the number of people buying homes?
To get the weekly picture of the housing market, watch the video above.
Don’t have time? Here are some quick takeaways from our latest data dive at Altos Research.
Inventory continues to build
There are 567,000 single-family homes on the market. As expected, that’s up 0.7% from last week. Housing inventory. growing in November is rare due to seasonality, but it looks like we’re roughly at the top.
Remember the Altos rule: If mortgage rates go up, inventory will build in 2024. If rates fall, inventory will also come down again.
Additionally, there are 62,000 new listings this week, with 9,000 of those already under contract. We have the same number of sellers now as last year, which tells us that further declines in home sales because of supply constraints are unlikely.
Transaction volume no longer decreasing YoY
Pending contracts saw fewer sales compared to last year until October. Now the trajectory is the same.
Plus, 39.2% of the homes on the housing market have had a price cut. That means the market looks a little more stabilized than it did in the fourth quarter of 2022.
We know how sensitive consumers are to changes in mortgage rates. When rates spike, mortgage demand is impacted.
Home prices still hold strong
Home prices continue to be 2% above last year and look to end the year at that level.
The median price of single-family homes is now $430,000.
Property Chomp’s Take:
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