Some call the current housing market a “correction,” while others describe it as “in transition.” The truth is, none of us know for sure what’s coming.
We know today’s real estate market is nothing like what we’ve become accustomed to. If you’re the adventurous type, this is an exciting time.
To help you weather the current market, let’s unpack the various forecasts floating around online and try to make some sense of them.
Concessions, concessions everywhere
When was the last time you saw an offer to purchase replete with buyer concessions? It’s pretty much unknown to new agents who’ve joined the industry in the past couple of years. Today, however, rate buydown requests, money for repairs, help with closing costs, etc., are making a comeback, according to research by Redfin.
“Home sellers gave concessions to buyers in 41.9% of home sales in the fourth quarter … That’s up from just over 30% in both the previous quarter and the fourth quarter of 2021,” claim Lily Katz and Taylor Marr at Redfin.com.
In 2022, San Diego saw concessions included in 73% of home sales, while 62.9% of Phoenix contracts contained concessions.
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Will rates quit their upward trajectory?
Experts are all over the place on this one. Greg McBride, Bankrate’s chief financial analyst, says that rates for a 30-year mortgage will sit at 5.25% by the end of 2023.
Between now and then, our survey of various experts shows:
- “Fannie Mae sees the average rate of a 30-year fixed getting to 6.8% in 2023,” claims Kevin Graham at Rocket Mortgage.
- Freddie Mac is predicting the 30-year rate will be 6.4%.
- Bob Broeksmit, the Mortgage Bankers Association’s president, projects a 5.2% 30-year rate by the end of this year. (HousingWire.com)
As you can see, the experts are all over the map when it comes to predicting future mortgage rates. To get a better feel for what to expect in the spring real estate market, the pros with Motley Fool urge us to keep an eye on the March Fed meeting (March 21 and 22, 2023).
Will there be buyers?
The ShowingTime Showing Index®, at the time of this writing, reports that home showings fell by more than 30% nationwide. This drop is due, in large part, to the typical winter slowdown, so it’s not as scary as it appears on the surface.
According to a survey at NBC.com, more than half of homebuyer respondents say that the economy is causing them to reconsider buying a home. The good news is that nearly 1/3 of respondents replied that they are still considering buying.
If the Fed plays nice, we may just have a decent spring real estate market. Keep in touch with your sphere and farm, and you’ll be way ahead of the game.
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