Focusing on a Resurgence in the Housing Market

The majority of people in the United States are in agreement that this is not an ideal time to purchase a home. However, it could be a great opportunity to start investing in a housing market rebound.

At the start of 2022, the housing market was not what most people had anticipated. The main issue for real-estate agents was the lack of available properties, while home builders were having difficulty increasing construction. Potential home buyers were not pleased with the rise in prices due to the pandemic and the increasing mortgage rates, but if they could manage it, they would purchase a home.

The National Association of Realtors predicted that sales of existing homes would be slightly lower this year, following a record-breaking year in 2006. Meanwhile, the National Association of Home Builders surveyed builders who expressed a positive outlook.

The outlook has become much more dismal. Mortgage rates have risen significantly this year, and the majority of people surveyed by the University of Michigan in the past month have declared it a bad time to purchase a home - the highest percentage in the survey's 60+ year history.

The National Association of Realtors reported on Wednesday that seasonally adjusted sales of existing homes had dropped for the 10th consecutive month in November, with a decrease of 35% from the same time the previous year. This was just above the low recorded in April 2020, when the pandemic had caused people to stay indoors. On Monday, the National Association of Home Builders reported that builder sentiment had reached its lowest point since the pandemic began, and the Commerce Department reported on Tuesday that construction had started on 32% fewer single-family homes in November than the year before.

The housing market could always decline further, however, it would need to reach the same levels as it did after the 2008 financial crisis for that to occur. It appears that a recovery, even if it is only a small one, is more likely than not. This recovery may not include some of the markets that have recently cooled off.

Mortgage rates have begun to decline after reaching a 20-year high of 7.08% in early November. According to Freddie Mac, the average rate on a 30-year mortgage is now 6.31%. As inflation decreases and Treasury market participants anticipate the Federal Reserve to reduce overnight rates in the near future, mortgage rates could continue to decrease in the coming months.

The job market is still strong, and many economists are predicting a mild recession in the coming year, but they don't anticipate a major impact on employment. Household finances are still in good condition, despite the effects of inflation. Additionally, the millennial generation is still driving demand for housing.

The housing market is unlikely to experience the same level of success as it did in 2021, but it is possible that it will have improved by the end of 2023.