Your clients look to you as the expert on the housing market, so it’s smart to keep up with trends.
Data on the national real estate market is mixed, with some signals that the sales are slowing and others that reveal a thriving market. Now that we’re halfway through 2022, we can look at data for this year on a national scale. You can put this into context for your customers by interpreting your local market data.
Existing home sales fell for the fourth consecutive month in May to an annual rate of 5.6 million sales in 2022, still a strong performance, according to the National Association of Realtors (NAR). Median sales prices spiked 21% in April 2022 over the last year, according to CoreLogic, a data analytics firm. CoreLogic anticipates price appreciation to slow over the coming year to 5.6%.
The combination of higher prices and higher mortgage rates is slowing demand a little,
particularly among first-time buyers, who represented 27% of all sales in May, according to NAR. In 2021, 31% of buyers were first-time purchasers.
But the Mortgage Bankers Association still expects mortgage rates to stabilize at 5% during the fourth quarter of 2022 and then dropping to average 4.8% for 2023. That may give buyers time to adapt to those rates, which spiked quickly from 3.55% in January 2022 to 5.23% in mid-June 2022, according to Freddie Mac.
While homes continued to sell in an average of 16 days in May, down from the previous month of 17 days, according to NAR, inventory of homes for sale is increasing. Total housing inventory in May was 1,160,000 units, an increase of 12.6% from April. The NAR estimates a 2.6-month supply of homes was available in May. That should ease the strain on buyers and already is reducing the number of bidding wars in many markets.
Home sales on track for a positive year
While higher mortgage rates may be keeping some first-time homebuyers on the sidelines for now, they have less of an impact on repeat homebuyers who can tap into the equity gained in their current home to move into their next.
No matter what market conditions are, people always have reasons to move. Jobs change, offices relocate or go remote, people retire, and household configurations change with marriages, children, divorce, and adult kids leaving home.
At least 4.3 million existing homes have sold every year for at least the past two decades, including 5.7 million in 2021, according to Mortgage News Daily.
While market uncertainty may have your clients a little uneasy, one thing you can always count on to provide a sense of security and certainty is a Cinch home warranty. Whether they are buyers or sellers, they can feel confident that a home repair will be covered and that they can rely on the Cinch network of trusted contractors. Learn more at cinchrealestate.com.