Is the Housing Recession Over?

According to the article by Melissa Dittmann Tracey, Lawrence Yun, chief economist for NAR mentioned that even though the recovery has not occurred, the housing recession is over.

HOME SALES

Since pending home sales slightly increased back in June, the latest data point to a recovering housing market. (Yay!) The National Association of Realtors’ Pending Home Sales Index increased 0.3% in June. While it may be small, that’s the first gain since February.

INVENTORY

Although housing inventories are still at historic lows, down 13.6% from last year’s lows, homebuilders are increasing production and hiring. (Hopefully, that will help lower the unemployment rate too.) It is important to increase the supply of homes, because inventory drives market prices. Increased construction will slow down market price increases.

New Construction Predictions

Because of increased inventory in this section of the market, new house sales will climb by 12.3% in 2023 to 720,000, and by another 13.9% in 2024 to 820,000. The national median new home price will fall 1.9% this year to $449,100 before rising 4.2% the next year to $468,000.

MORTGAGE RATES

Additionally, mortgage rate increases seem to have stopped. According to NAR, the 30-year fixed-rate mortgage might hit 6.4% by the end of the year, declining to 6% in 2024. This factor also supports the housing market is improving. A meaningful decline in mortgage rates could send to a flood of buyers in the coming year or so.

COLDWELL BANKER’S MOVE METER

Since NAR predicts existing-home sales to increase by 15.5% in 2024, now is the time to begin thinking of your next move. Check out Coldwell Banker’s Move Meter to see what it will take to make your next move.

REGIONAL COMPARISON

The map below shows regional numbers, so compare where you are to where you want to go/be.

*Summary: Contract signings increased in the Northeast and Midwest, but they decreased in the South and West.

*Source: Tracey, M. D. (2023, July 27). NAR Economist: ‘Housing Recession Is Over’. Realtor Magazine. https://www.nar.realtor/magazine/real-estate-news/economy/nar-economist-housing-recession-is-over