2022 was a turbulent year for the US housing market, as inflation, soaring interest rates, and elevated sales prices combined to cause a slowdown nationwide. Affordability challenges continue to limit market activity, with pending home sales and existing-home sales down month-over-month and falling 37.8% and 35.4% year-over-year, respectively, according to the National Association of REALTORS® (NAR). Higher mortgage rates are also impacting prospective sellers, many of whom have locked in historically low rates and have chosen to wait until market conditions improve before selling their home.
New listings decreased 40.1% for single family homes and 39.9% for townhouse-condo homes.
Pending sales decreased 52.2% for single family homes and 59% for townhouse-condo homes.
Inventory increased 30.2% for single family homes and 38.7% for townhouse-condo homes.
Median Sales Price
Median sales price decreased 5.8% to $900K for single family homes but increased 1.7% to $600K for townhouse-condo homes.
Days on Market
Days on market increased 89.5% for single family homes and 89.5% for townhouse-condo homes.
Months Supply of Inventory
Months supply of inventory increased 77.8% for single family homes and 100% for townhouse-condo homes.
Economists predict sales will continue to slow and housing prices will soften in many markets over the next 12 months, with larger price declines projected in more expensive areas. However, national inventory shortages will likely keep prices from dropping too much, as buyer demand continues to outpace supply, which remains limited at 3.3 months, according to NAR. Even if prices fall, many prospective buyers will find it difficult to afford a home in 2023, as higher rates have diminished purchasing power, adding hundreds of dollars to monthly mortgage payments.
[This report was provided by the Pacific Association of REALTORS® (PWR).]