Home selling activity next year could reach the lowest point since the early 1980s for households Buying or selling real estate Market downturn, Redfin deputy chief economist Taylor Marr predicts.
Marr predicts that only 32 out of 1,000 households will sell their homes in 2023.
Marr said affordability in the housing market is likely to “remain a very strong constraint” next year even if it eases mortgage rates.
“Mortgage interest rates It’s gone up really fast this year… it’s raised the monthly premiums by about 50%, Marr said. We expect some moderation in prices next year. But even after accounting for that and higher prices in general, affordability is likely to remain a very strong constraint.”
Mortgage rates fell to For the fourth time in a row This week according to Freddie Mac. The Mortgage Securities Corporation reported Thursday that the 30-year rate fell to 6.33% from 6.49%. A year ago the average rate was 3.1%.
Even if rates fall below 6%, or 5.8%, by the end of the year, based on Redfin’s current forecasts, rates will still be at their highest level since 2008.
Moreover, Marr said that many sellers have no plans to return to the market anytime soon.
He said that people who had considered their homes or were selling them “decided that they were going to wait a few years until the prices were much lower and the economic environment improved.”
With the challenges of affordability, inflation and Growing fears of recessionRedfin predicts that there will be just 4.3 million existing home sales. Meanwhile, there will be about 132.5 million households real estate brokerage projects.
“Households have grown steadily each decade, but current home sales are more volatile and have had more booms and slumps,” Marr said.
On the other hand, the rental market has slowed down due to more new construction being available as more renters remain.
“This puts less pressure on rents and therefore inflation as well, which will really take shape in the new year,” he added.
The brokerage estimated that rents will see a slight annual decline by the middle of next year “with drops occurring much sooner in some metros.”
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