As we continue into the second half of 2023, it’s becoming quite clear that some of the initial predictions and forecasts for the housing market are falling short - especially when we look at inventory. In January, national housing data showed a 75% increase in available homes from the previous year, and Altos Research, a top market data company, forecasted inventory would rise to around 700,000 units by the end of 2023. However, the U.S. data currently shows that there are around 467,000 single-family homes on the market, which is 2% lower than this time last year.
Interest rates have played an integral role in these trends. When interest rates were down around 3%, inventory was swiftly diminished as buyers couldn’t resist the opportunity. And while it may have been a party for anyone who took advantage, the long-term effects are nothing worth celebrating. Like any market, it all boils down to supply and demand. Once demand skyrocketed, inventory plummeted, and prices soared. Remember your recent tax assessment? Those assessed value jumps were also a direct result of the 2020-22 frenzy and associated appreciation. Now we have to deal with the combination of those drastic price increases, coupled with much higher interest rates.
Coming back to those initial 2023 forecasts, it shouldn’t be a surprise that inventory was predicted to make a comeback - low interest rates erased active listings, but once rates virtually doubled we’d expect to see the opposite. It seemed like that scenario would play out back in January, but buyers came to terms with the higher mortgage rates sooner than expected. As a result, inventory has remained low, and housing prices have been stable - even on the rise in some areas.
How to Gain An Advantage in This Market
As we’ve discussed before, making a move should always come down to your personal situation, not the market conditions. Fortunately at 8z, we have a number of modern solutions that could help you overcome prices and mortgage rates.
With our Cash Buyer program, there’s a greater chance you beat out the competition, and lock in a lower purchase price with an all-cash offer. Any money you save on the purchase price can be used to permanently or temporarily buy down your interest rate, make home repairs, etc.
If you use our Modern Bridge solution, you can buy your new home, then sell your current home. We arm you with an all-cash offer for your new purchase, then you can sell your current home on the open market where you’ll see the best return. So, you may get to realize the benefits of the cash offer explained above, remove the stress of the traditional moving process, then maximize the sale of your current home.
Last but certainly not least, if you work with 8z Mortgage you can utilize our Refinance Rewards program. This allows you to refinance at virtually no cost anytime within three years of your loan origination. If rates drop, we have your back with an easy way to lower your interest rate.