It feels like every day there are contradictory reports in the media about the current housing market.
‘It’s too hot, the bubble’s going to burst’
‘The market’s cooling, but prices are high’
‘Inventory is up’
‘Inventory is still synched’
Which way is up? It likely depends on your market. But this continued uncertainty is exhausting consumers. According to Fannie Mae’s March edition of their Home Purchase Sentiment Index® (HPSI), “Only 24% of consumers think now is a good time to buy a home — the lowest reading ever recorded in a monthly survey conducted by Fannie Mae since 2010.” Additionally, according to the survey, “73 percent of Americans think the economy is on the wrong track.”
On the other hand, a Redfin survey from February said 1 in 3 people were looking to relocate. So which is it? Are people moving or staying put?
Only time will tell what actions our will clients take, but based on our data, we predict home sales will slow from what we’ve been used to over the last two years, but even that pessimistic attitude reported of buyers won’t stop the continued sales.
The Home Sales Predictor
Here's a look at our most recent data:
Our March prediction was just 1% off with 536K home sales. That was a 28% increase in home sales from February, but a 6% decrease year-over-year.
Based on the activity of agents in our products we predict there will be a 5% increase from March 564K home sales in April and then another 10% increase in May with 620K home sales. That’s a 7% decrease year over year for April, but a 2% increase YOY for May.
So while the market may be cooling compared to 2020/2021 standards we are still expecting to see 620K home sales next month which means it’s not cooling down all that much, at least not yet.
We of course know that continued inflation and interest rate hikes are going to impact the market, time will tell how much.
At the end of the day, homes are still going to be bought and sold. The question really lies in whether or not the market will stabilize enough for it to become affordable again for first time homebuyers to enter the market. Or, if the barrier to entry will continue to get tighter. It’s Fair Housing Month which means this is a great time to take a step back and see how you are helping your community. NAR has a ton of resources to help you assess and see what more you can do to help combat the barrier to entry.
The dream of homeownership should be able to belong to anyone. As brokers and agents you have the power to help make those dreams come true. You also have the most insight into how your market is performing and how your buyers and sellers can get the most bang for their buck. Make sure your systems and processes are top notch in order to help your clients make the right decision for their market.
The Home Sales Predictor is a set of prediction data that dives into the number of presentations created and the correlated number of U.S. home sales. This data is provided by MoxiWorks with insights from their MoxiPresent product.