Housing Market Predictions 2022 to 2025
What are the housing market predictions for 2022, 2023, and so on? This appears to be a frequently asked question. Everybody is talking about housing, but how is the market doing? Is the housing market ascending or is it on the decline? If you're wondering how the housing market will fare over the next twelve months, especially if you're an investor, there's some good news for you.
In light of what real estate professionals are forecasting, these are some educated predictions about what the future of the United States housing market will look like. Despite these early signs of a slowing market, it remains as hot as ever for homebuyers, with new records set for home-selling speeds and price increases.
Prices are rising due to a mismatch between supply and demand, but this is not a housing bubble. Many experts predicted that the pandemic would cause a housing crash on par with the Great Depression. That, however, is not going to happen. The market is in far better shape today than it was a decade ago. The housing industry has had a boom last year, with the largest annual gain in single-family house values and rentals, historically low foreclosure rates, and the highest number of home sales in 15 years.
Over the past decade, chronic underbuilding and the influx of millions of millennials into the homebuying market have resulted in a major mismatch in housing supply and demand. Despite the fact that mortgage rates are skyrocketing, housing prices are not expected to slow down any time soon. The most likely effect is a slower rate of appreciation.
The April 2022 housing statistics release from Realtor.com® demonstrates that housing demand has continued to moderate, despite rising property prices and mortgage rates. In April, the median list price of a home reached an all-time high, while the number of pending listings (those in the process of being sold) decreased.
Additionally, sellers have returned, and the number of newly listed homes has finally increased compared to the same period last year. In the following weeks, inventory is also expected to increase relative to last year, so buyers who are able to remain in the market this year may encounter less competition and more options.
Here's what experts predict will happen in the housing market in the coming months and years. The sharp rise in mortgage rates is driving away more homebuyers, but it also appears to be discouraging some homeowners from selling. With both demand and supply falling, the market is unlikely to shift from a seller's to a buyer's market anytime soon.
Rising mortgage rates may take some of the steam out of the market, allowing inventory to rise slightly. It would also slow the rate of home price appreciation and reduce the possibility of a red-hot housing market resulting in an overheated market. The supply of available homes is so low that even a significant drop in demand due to higher interest rates will not turn this into a buyer's real estate market, according to industry experts.
Because there are not enough houses available to meet demand, home prices will continue to rise, but the combination of rising home prices and elevated mortgage rates means fewer people will be able to afford to buy. There would still be continuous price appreciation, scarcity of inventory, and good demand. Some markets will experience lower appreciation rates than others, with the Sunbelt performing particularly well.
Home prices do not appear to be decreasing, even in some of the country's most expensive markets, the tier one markets. For example, according to CoreLogic, these large cities continued to experience price increases in February, with Phoenix on top at 30.4% year over year. The second rank was held by Las Vegas with 26.5% year-over-year price growth followed by San Diego (25.2%).
Will The Housing Market Crash in 2022 | 2023 | 2025?
The overarching question is that will the housing market crash? The simple answer is that it will not crash in 2022, 2023, or 2025. Rising rates aren’t cooling the market as some expected. The current trends and the forecast for the next 12 to 24 months clearly show that most likely the housing market is expected to stay robust, with many of the trends that propelled real estate to new heights last year remaining firmly in place this year as well.
In recent years, the price of homes has climbed dramatically. Many prospective buyers, especially those with limited financial resources, are eager to hear whether and when home prices will become more accessible.
Here Is When Housing Market Prices Are Going to Crash. While this may appear to be an oversimplification, this is how markets operate.
When demand is satisfied, prices fall. In many housing markets, there is an extreme demand for properties at the moment, and there simply aren't enough homes to sell to prospective buyers. Home construction has been increasing in recent years, but they are so far behind to catch up. Thus, to see significant declines in home prices, we would need to see significant declines in buyer demand.
Demand declines primarily as a result of rising interest rates or a slowing economy in general. Ultimately, for rising interest rates to destroy home values, we'd need substantially less demand and far more housing supply than we presently have. Even if price growth moderates this year, it is extremely improbable that home prices will crash.
Thus, there will be no crash in home prices in 2022; rather, there will be a pullback, which is normal for any asset class. The home price growth in the United States is forecasted to just “moderate” or slow down in 2022 or 2023.
Ultimately, for rising interest rates to destroy home values, we'd need substantially less demand and far more housing supply than we presently have. Even if price growth moderates this year, it is extremely improbable that home prices will crash.
Mortgage rates are expected to increase somewhat but stay historically low, home sales will reach a 16-year high, and price and rent growth will drop significantly compared to 2021. Affordability will be a concern for many, as home prices will continue to rise, if at a slower pace than the previous year.
With 10 years having now passed since the Great Recession, the U.S. has been on the longest period of continued economic expansion on record. The housing market has been along for much of the ride and continues to benefit greatly from the overall health of the economy. However, hot economies eventually cool and with that, hot housing markets move more towards balance. Housing market forecasts are essentially informed guesses based on existing patterns.
While the real estate pace of last year appears to be reverting to seasonality as we approach 2022, demand is not waning. Increasing interest rates will almost certainly have a greater impact on the national housing market in the early months of 2022 than any other factor. While sellers remain in an advantageous position, price stability and the continuation of competitive interest rates may provide some much-needed relief to buyers this year. Housing supply is and will likely remain a challenge for some time as labor and material shortages, as well as general supply chain issues, delay new construction.
The latest housing market trends show that prices are rising in most parts of the country and most price segments because of the lack of supply. Economic activities are ramping up in all sectors, mortgage rates are rising, and jobs are also recovering. The housing market remains largely a seller's market due to demand still outpacing supply. The inventory of available houses continues to be a constraint on both buyers and sellers.
Forecasting home price appreciation is a challenging task. While inventory has increased slightly, it remains significantly below pre-pandemic levels and is simply unable to meet current demand. Tight supply following years of underbuilding, combined with increased demand due to remote work, and US demographics — will continue to be a factor in 2022 & 2023. It will continue to be a seller's real estate market in 2022. Expect to see bidding wars on several houses, especially as the spring and summer shopping seasons approach.
Let's look at what experts forecast regarding the US housing market through at least 2023, and you'll get a better idea of what to expect. Most of them say that prices aren’t likely to drop in the near future.
The housing market is coming off a year in which home prices in the United States increased by an unsustainable 18.8%. Will the market continue to grow at this rate or will it be a little less frenetic this year? The housing market is even tighter now than it was prior to the spring 2021 housing frenzy. Even industry titans like Zillow increased their bullishness in January, increasing their projected home price growth rate for 2022 up to 16.4 percent.
However, they subsequently determined that even this rate was too conservative. The home listing site now predicts that the year-over-year rate of home price growth will hit 22% in May — an acceleration of home price growth. It would then gradually slow through February 2023 by the end of which the typical U.S. home is expected to be worth almost $400,000. This robust long-term outlook is driven by their expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes.
According to another study by Zillow, the total value of private residential real estate in the United States increased by a record $6.9 trillion in 2021, to $43.4 trillion. Since the lows of the post-recession market and the corresponding building slump, the value of housing in the United States has more than doubled. The most expensive third of homes account for more than 60% of the total market value. The market value hit the $40 trillion mark in June of last year and since has been gaining an average of more than half a trillion dollars per month.
One of the most widely held housing market predictions for 2022 is that inventory will remain scarce but price appreciation will be slower than it was this year. While spring and summer will likely see an increase in listings, it is unlikely that there will be enough to meet demand. The housing market has been particularly robust in 2021, with high demand for homes in almost every area of the nation. The same trend will follow in 2022.
The shortage of inventory has created a red-hot housing market, with homes selling within hours of being listed, frequently for well over the asking price. According to many housing experts, buyers can predict similar trends this year to those seen over the last two years: increased prices, low inventory, and quick turnaround.
However, some significant hurdles are approaching the US housing market. Most experts had predicted mortgage rates for housing to rise this year. The cost of borrowing money through mortgages has been steadily increasing this year. Most experts predicted that mortgage rates would climb this year, but they did so more quickly than expected, averaging more than 4% for 30-year fixed-rate mortgages in mid-February. Around mid-April, it surged to 5.28 percent, the highest level since April 2010, and the uptick continues.
Monthly affordability will suffer as interest rates rise, but we'll also lose more of the investment-type buyers looking for once-in-a-lifetime leverage. As a result, rising interest rates may also imply a more stable market. With rates that low in 2021, all kinds of buyers rushed in, and with little housing supply to match, price rise has been ferocious.
This also emphasizes affordability. The basics of housing needs would still continue to drive primary purchases forward. It's a good thing that the housing market will be less heated in 2022 and 2023. Let's take a closer look at why the housing market is showing some signs of a slowdown in 2022 & beyond.
Fannie Mae predicts that a double-digit home price rise will continue until the middle of 2022. Still, it won't be until 2023 that home value appreciation recovers to the pre-pandemic rate of 5%. Based on this, prospective investors may be pessimistic about the 2023 market. While prices are not expected to fall, Fannie Mae anticipates that price growth will be slower than usual in 2023. A slowing in the home price appreciation and possibly increased inventory could help avoid a real estate market disaster in 2023.
As of April 2022, government-sponsored enterprise anticipates a slowing housing market over their projected horizon. Mortgage rates have hiked up considerably in recent months, and such large moves have typically resulted in a housing slowdown. As a result, they forecast a slowdown in home sales, house prices, and mortgage volume during the next two years. They anticipate that the house price rise will slow to a pace more in line with income growth and interest rates.
Many potential purchasers, particularly millennials, have been priced out of the market as home prices have grown at an exponential rate. Purchase mortgage origination volumes are expected to grow to $2.1 trillion in 2023, $27 billion higher than the previous forecast. The refinance originations are expected to be around $1.1 trillion in 2023, as the impact of stronger home prices and higher interest rates are projected to offset each other.
This has been beneficial to house flippers, but that may alter the 2023 housing market. Mark Zandi, the chief economist of Moody's Analytics, said he is concerned about a harsh landing in the housing market, but he believes the market and economy will not collapse as they did last time. He believes that for the 2023 housing market, home prices will level off, decreasing in certain sections of the country while rising somewhat in others. In comparison to the rise in 2022, this prediction for 2023 appears fairly reasonable.
According to Zillow, the current typical value of homes in the United States is $337,560. This value is seasonally adjusted and only includes the middle price tier of homes. In March 2021, the typical value of homes was $279,000. Home values have gone up 20.6% over the past year and Zillow predicts they will rise 17.8% over the next twelve months, i.e; by the end of February 2023.
Zillow's housing market forecast for 2022 has improved. The real estate listing site now claims that its previous forecast was too pessimistic.
The forecasts for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand.
Back in December, the company predicted that the 12-month rate of home price growth would decelerate to 11% by the end of the year. Then in January 2022, Zillow revised that figure — saying that we would finish 2022 up 16.4%. As of March, it forecasts that home price rise will peak at 22 percent in May before gradually slowing thereon.
Simply put, Zillow anticipates that the 2022 spring housing market will heat up even more. The main downside risk to its prediction is rising inflation, which increases the likelihood of near-term monetary policy tightening, increasing mortgage rates, and weighing on housing demand.
- Their bullish long-term outlook is based on their expectation that tight market conditions will persist, with housing demand exceeding supply.
- Zillow expects annual home value growth to continue to accelerate through the spring, peaking at 22% in May before gradually slowing to 17.8% by February 2023.
- Monthly home value growth is also expected to continue accelerating in the coming months, rising to 1.8% in March and growing to 2% in both APRIL & MAY before slowing somewhat.
- By the end of February 2023, the typical U.S. home is expected to be worth more than $400,000.
- Existing sales volume (SAAR) is expected to remain the same in March as in February, before climbing slightly to around 6.4 million, where it is forecast to remain through the remainder of the year.
- Overall, Zillow expects 6.416 million existing homes to sell in 2022, up 4.8% from an already strong 2021.
- Existing sales volume (SAAR) is expected to grow throughout the spring home shopping season, before falling very slightly beginning in July.
The robust long-term outlook is driven by the expectations for tight market conditions to persist, with demand for housing exceeding the supply of available homes. While Zillow's housing market forecast is bullish, it is also a bit of an outlier when compared to CoreLogic's forecast. The CoreLogic HPI Forecast shows that higher mortgage rates erode buyer affordability and should dampen demand in the coming months, leading to the moderation in price growth in their forecast.
Their national year-over-year appreciation will slow to 5% by February 2023, as rising interest rates are expected to sideline even more buyers. U.S. home price growth registered a year-over-year increase of 20% in February, another series high and marking 12 months of consecutive double-digit gains. The CoreLogic HPI Forecast indicates that home prices will increase on a year-over-year basis by 5% from February 2022 to February 2023.
On the other hand, Fannie Mae's housing market prediction is less bullish than Zillow's. According to their recent housing market forecast, home price growth will remain strong but decelerate. They predict the effects of worsening affordability to lead to a drag on home price growth.
They still expect strong appreciation for this year as inventories currently remain very tight and measures of buyer traffic remain robust. Fannie Mae's expectation of 7.6 percent growth in 2022 is still considerably higher than the average pace of 5.4 from 2012 to 2019. However, this represents a large deceleration from 2021’s expected record house price growth of 17.3 percent.
The FMHPI is an indicator for typical house price inflation in the United States. It shows that home prices increased by 11.3 percent in 2020 and 15.9 percent in 2021, as a result of robust housing demand and record low mortgage rates. According to Freddie Mac's recent housing forecast, house value growth in 2022 will be less than half of what we've witnessed last year.
Given the anticipated rise in mortgage rates, Freddie Mac anticipates some cooling in housing demand, forecasting house price growth to slow from 15.9 percent in 2021 to 6.2 percent in 2022 and then to 2.5 percent in 2023. Home sales were strong in 2021, with fourth-quarter home sales expected to come in at 7.1 million. They forecast home sales to hit 6.9 million in 2022 and increase to 7.0 million in 2023.
The increase in house price growth will be less transitory than the increase in consumer prices, as the U.S. housing market will continue to struggle with a shortage of available housing for many months to come. Strong house price growth is expected to lift home purchase mortgage originations from $1.9 trillion in 2021 to $2.1 trillion in 2022.
With a higher mortgage rate forecast for 2022 and 2023, they anticipate refinancing activity to soften, with refinancing originations declining from $2.7 trillion in 2021 to $1.2 trillion in 2022 and $930 billion in 2023. Overall, the company forecasts total originations to decline from the high of $4.7 trillion in 2021 to $3.3 trillion in 2022 to $3.1 trillion in 2023.
Housing Market Forecast 2022: Will Prices or Sales Decline?
The prices are not going to decline in 2022. The various forecasts from experts show that 2022 will remain a sellers' housing market, and home values are expected to increase by double-digit percentage points. If mortgage rates continue to rise, although, at a slower rate than in recent months, demand will likely decrease in the fall and winter, while home prices will continue to grow, albeit at a slower rate.
The real estate market has emerged as a boon for sellers and a source of worry for buyers in the middle of this epidemic. Home prices have been increasing in the mid-single digits for many years. Recent double-digit price rises reflect the convergence of exceptional demand and chronically low supply.
Prices are increasing as a result of enough money on the sidelines and very low mortgage rates. The improving economy and the approaching peak homebuying years of millennials are driving a residential housing boom. The housing supply is now at its lowest level since the 1970s, due to millennial homeownership and other factors such as rising building prices and real estate speculators snapping up starter homes.
In March 2022, 28 percent of total sales were made in cash, the highest level since July 2014. This indicates that nearly one-third of purchases are conducted with cash, indicating that there is a sizeable group of buyers who are not sensitive to interest rates. This also indicates that higher interest rates will have less of an influence on the housing market than one might expect. Detached single-family houses continue to be in great demand.
These properties provide greater living space and separation from adjacent houses than attached properties provide. Despite rising interest rates, the median home price for new residential homes in March 2022 was greater than in March 2021, according to data from the Census Bureau and HUD. The median price of a new home in March increased by 21.4% year-over-year to $436,700.
Almost every home sold last month was priced at or above $200,000. A strong home price increase is anticipated to continue through the remainder of this year and into 2023. This also implies that despite rising interest rates, individuals are still willing to pay top money for homes. But with a near record-low inventory of previously owned homes, economists believe higher borrowing costs will have a moderate impact on the new housing market.
There were 407,000 new homes on the market, up from 392,000 units in February. Houses under construction made up 65.5% of the inventory, with homes yet to be built accounting for about 25.8%. At March's sales pace it would take 6.4 months to clear the supply of new houses on the market, up from 5.6 months in February.
In the long run, an infusion of newly-built homes could benefit the housing market. But there won't likely be a surge in new inventories this year or even next year. Builders cannot develop new homes quickly enough to meet up with customer demand. Over a decade of underbuilding in the new home sector has increased pent-up demand, despite builders' best efforts to increase inventory.
According to the most recent housing market forecast (by realtor.com), home price growth will slow further in 2022 but will continue to rise. As housing costs continue to consume a greater portion of home purchasers' paychecks, buyers will become more inventive. Many will take advantage of continued workplace flexibility to relocate to the suburbs, where many can still find homes at a lower price per square foot than in nearby cities. Prices will remain high, inventory will remain scarce, and mortgage rates will climb.
- Home sales prices are expected to continue rising, resulting in a decade-long string of year-over-year gains beginning in early 2022.
- Looking ahead, Realtor.com anticipates that with economic growth projected to sustain enthusiastic purchasers' spending power, the median home sales price will continue to rise, gaining 2.9 percent in 2022, a somewhat slower rate.
- Homebuyers will face increased monthly costs as a result of rising prices and borrowing rates.
- Affordability constraints will prevent prices from increasing at the same rate as they did in 2021, even as supply-demand factors continue to drive prices upward nationwide.
- The housing market will remain competitive for buyers in 2022, particularly those looking for homes in entry-level price tiers.
- Numerous protective buyers (millennials) imply rising property prices, which, when paired with rising mortgage rates, would result in greater monthly payments for buyers.
- At a national level, they expect to see continued home sales growth in 2022 of 6.6% which will mean 16-year highs for sales nationwide and in many metro areas.
- With almost 45 million millennials between the ages of 26 and 35 who are prime first-time homebuyers in 2022, housing demand is likely to continue strong.
- 2022 is expected to have the 2nd highest sales level in the last 15 years, bested only by 2021.
- First-time homebuyers will need to be successful in the 2022 housing market if we are going to see the homeownership rate begin to climb again.
The listing price, also known as the asking price, is the amount a seller has marketed a property for, whereas the sale price is the amount it ultimately sells for. In March, the national median listing price for active listings was $405,000, up 13.5% compared to last year. The median existing-home sales price rose to $375,300, up 15% from one year ago. The median sales price of homes increased 15.0 percent to $357,300, marking the 120th consecutive month of year-over-year gains, marking 121 consecutive months of year-over-year increases, the longest-running streak on record.
Much of the growth was fueled by a 21.2 percent increase in property prices in the South. All other regions experienced home price growth of between 5% and 11%.
- The median existing single-family home price was $382,000 in March, up 15.2% from March 2021.
- The median existing condo price was $322,000, an annual increase of 11.9% over 2021.
- The median price in the Northeast was $390,200, up 6.8% from one year ago.
- The median price in the Midwest was $271,000, a 10.4% climb from March 2021.
- The median price in the South was $339,000, a 21.2% jump from one year prior.
- For the sixth straight month, the South experienced the highest pace of price appreciation compared to the other regions.
- The median price in the West was $519,900, up 5.4% from February 2021.
Will Mortgage Rates Rise Continue to Rise in 2022?
Housing prices have risen in the first quarter of 2022 despite rising mortgage rates, indicating a mismatch. Mortgage rates will eventually slow down home prices. Economists predicted rates to rise by the end of 2022, but the recent surge in rates has many analysts wondering what would happen next. It happened faster than many predicted, with rates on 30-year fixed loans breaking through 5 percent in April to the highest level in more than a decade.
As mortgage rates rise, competition among those who can afford to buy should continue fierce for the time being. Also, as rates have risen beyond 5%, the refinancing boom of 2020 and 2021 also appears to be finished. According to Black Knight data, rate-and-term refinance activity continued to fall in March, while cash-out refinances remained unchanged.
The economic recovery, particularly inflation, has been very evident in the late epidemic phases, and we now face a backdrop of mortgage rates rising at the quickest rate in decades. More than two-thirds of mortgage experts surveyed by Bankrate believe rates will continue to rise since inflation is not slowing down quickly.
The Fed is likely to raise interest rates several times this year, and its policy has a direct impact on the interest rates on various mortgage products, specifically adjustable-rate mortgages and home equity loans. Fed policy has fewer repercussions for fixed mortgage rates, which track 10-year Treasury yields more closely. Borrowers will see an end to the historically low rates that typified the period following the 2008 and 2009 global financial crises.
As of May 13, 2022, the national average 30-year fixed-mortgage rate is 5.57 percent, up 15 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 5.07 percent. The average rate for a 15-year fixed mortgage is 4.81 percent, up 9 basis points from a week ago. Almost a year ago, the benchmark 30-year fixed-rate mortgage was at 3.21 percent.
- At the current average rate, you’ll pay a combined $569.04 per month in principal and interest for every $100k you borrow.
- That’s an extra $7.51 compared with last week.
- Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $525 per $100k borrowed.
- Monthly payments on a 5/1 ARM at 3.85 percent would cost about $468 for each $100,000 borrowed over the initial five years
- But it could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.
With inflation blazing and the U.S. economy chugging along, the average 30-year mortgage rate rose to 5.28 percent this week, up from 5.12 percent the previous week, according to Bankrate's nationwide poll of large lenders, the highest level since April 2010. The 12-year peak in mortgage rates comes as the Federal Reserve moved to raise interest rates, the central bank’s first increase since 2018. One of the primary challenges that investors and buyers will need to address this year is rising interest rates.
Today's rates are much higher than they have been in years, which is likely to have a few knock-on consequences in the US housing market – though they are unlikely to produce significant declines in housing prices. While quickly rising mortgage rates may dampen the strong housing demand somewhat, do not anticipate a halt to home price appreciation. A slower rate of appreciation is more likely.
Keep in mind that, despite recent increases, mortgage interest rates are still within reach when seen in historical context (back in 1981, rates topped 18 percent for a 30-year fixed-rate mortgage). If the house you're eyeing is a good fit for your family and won't put you in financial peril, go ahead and buy it. The longer you delay, the more money you'll have to spend on rising rentals and saving for the down payment you'll need to buy a house. It all depends on your financial status and the housing market in the area where you live.
Rising mortgage rates still have the potential to drive a sizable portion of buyers away from the housing market. This year has already seen a significant increase in housing prices. When combined with interest rate increases, it may become too much for many homebuyers. As a result, the first half of the year is likely to see continued high house prices. When inventory increases and mortgage rates rise, the housing market may soften in the second half of 2022 and in 2023.
Even with rising mortgage rates and higher prices, the housing market would remain a seller's market due to low supply and increasing demand as more millennials are projected to buy houses in 2022. Now millennials make up the largest share of homebuyers in the US, according to a 2020 survey from the NAR. According to a new study by Realtor.com, buying is more cost-efficient than renting in a growing number of the largest cities in the country.
This is encouraging news for the millions of millennials who are approaching peak homebuying age. Millennials are the largest generation in history, and they are already in their mid-thirties, approaching their prime home-buying years. They were delayed in purchasing a home, but are now back in full force. Thus, we have two, four, or five years of millennial homeownership.
According to the National Association of Realtors, existing-home sales fell 2.7 percent in March to a seasonally adjusted annualized rate of 5.77 million units. February's reading was also revised downward, from 6.02 million to 5.93 million units, a bigger decline than typical. March sales were down 4.5 percent from the same month in 2021.
The reading is based on closings, which indicates that the contracts were likely signed in January and February when mortgage rates began to rise but had not yet risen as dramatically as they did in March. According to Mortgage News Daily, the average rate on a 30-year fixed mortgage was 3.29 percent in early January and increased to 3.9 percent by the end of February. The 30-year fixed-rate has increased to 5.35 percent from 5.35 percent previously.
Sales of homes between $100,000 and $250,000 were down 21% year over year, while sales of properties between $750,000 and $1 million increased 30%. Homes priced over $1 million witnessed a 25% increase in sales. Homes for sale are selling swiftly, with an average of 17 days on the market, down from 18 days a year earlier. Cash sales accounted for 28% of total sales in March, the highest percentage since July 2014. Distressed sales – foreclosures and short sales – represented less than 1% of sales in March, equal to the percentage seen in both February 2022 and March 2021.
There were 950,000 properties for sale at the end of March, a decline of 9.5 percent year over year. At the current rate of sales, this amounts to a two-month supply. The supply of available properties is greatest at the low end of the market, skewing sales toward the higher end. Few sales are occurring in the low end because of the lack of inventory. Therefore, more supply is needed at the lower end of the market to boost sales.
First-time buyers were responsible for 30% of sales in March, up from 29% in February and down from 32% in March 2021. Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in March, down from 19% in February but up from 15% in March 2021.
Single-family home sales decreased to a seasonally adjusted annual rate of 5.13 million in March, down 2.7% from 5.27 million in February and down 3.8% from one year ago. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 640,000 units in March, down 3.0% from 660,000 in February and down 9.9% from one year ago.
The South accounted for over half of all the sales in March, accounting for 45 percent, followed by the Midwest at 22 percent and the West at 21 percent, with the Northeast accounting for only 12 percent. The highest sales were seen in the price segment of $250,000 to $500,000. This price range accounted for 43% of total home sales seen in March. The price segment in the $100,000 to $250,000 range accounted for 21% of total home sales.
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