If you’re planning to buy a home this year, you’re not alone.
A new NerdWallet survey finds that “… about 28 million Americans” have plans to buy a home in 2023.
That’s the happy news.
According to the same survey, these would-be homebuyers think that they will spend $269,200 on the home. That’s not-so-happy news.
In fact, that figure, according to NerdWallet.com’s Elizabeth Renter, illustrates “… an unrealistic optimism.”
Why?
Current Housing Market Trends – A Major Gap In Expectations
The nationwide median price of a home in January (the latest figure available at the time of this writing), was $359,000, according to housing market experts at NAR.realtor.
In reality, the median home price hasn’t been as low as the figure dancing through potential buyers’ heads since 2013, claims Renter, citing Federal Reserve statistics.
While this is good news for home sellers (because this figure represents a month-over-month price increase) it shows that most home buyers, and most likely, home sellers, lack an understanding of the current housing market.
Home price activity in our market. Yes, the national housing market is a product of the economy overall, but to understand the local market you’ll need to follow home prices here, at home. Remember, all real estate is local, and not every market is faring the same.
For instance, Holden Lewis with NerdWallet.com claims, “Home prices already have been falling, especially on the West Coast, and prices will fall in some cities in 2023,”
That “some cities” claim is more proof that not all real estate markets are reacting similarly. Thus, again, it the importance of understanding what’s happening in our market.
The current housing market trends in Delray Beach is higher prices. In fact, February 2023 prices were 19% higher than a year earlier. If you’d like to follow my narrative on this, I create a monthly “How’s the Delray Beach market update” your can watch, here.
Current Housing Market Trends – Mortgage Rates
Did you know over the past 50 years, the average 30-year mortgage rate is 7.75%? (NerdWallet.com).
Put in that context, our current rates, albeit frequently fluctuating, are far below the historic average. As of February 2023, weekly averages were 6.5% for a 30-year mortgage and 5.76% for a 15-year mortgage, according to Freddie Mac’s Primary Mortgage Market Survey®. Economists expect them to decline further if inflation eases.
But, with a strong economy and employment staying “stubbornly high”, according to the Federal Reserve… Current housing market trends may shift and rate could rise higher than most think.
There are two additional Current housing market trends things to watch:
- Inflation news
- Current mortgage rates being evaluated against the average over the past 50 years.
Mortgage rates change daily. If your aim is to buy a home sooner rather than later and you have an idea of an interest rate you can tolerate, check rates online as often as possible. This allows you to follow and “… understand the trends and make sure you’re getting the best rate,” suggests Ben Luthi at Bankrate.com.
“Just keep in mind that your specific rate could be lower or higher than the average rate, depending on your financial profile, down payment and other factors,” he concludes.
If you’re brand new to the world of real estate and economics, I suggest that you check out the Congressional Research Service’s Introduction to U.S. Economy: Housing Market. It’s a quick, informative read.
The most important thing to do while waiting to sell or buy a home is to learn as much about the market and the process as possible. I’m always willing to share knowledge of the market with you and point you to experts if you have questions about the mortgage process and mortgage rates.
I’ll leave you with this: current housing market trends vary from state, city, town. If you’re reading national headlines, it won’t serve your needs. Find and follow someone with the local knowledge you need.
And remember, there’s no such thing as a bad question, so ask away!
