THE DAILY DOSE
Daily Real Estate News & Tips & Trends May 1, 2023
Is the correction over?
The Case-Shiller home price index ROSE 0.2% month-over-month in February 2023, the first increase since June 2022. Have prices bottomed already? The national index is down just 2.8% from its peak. That’s not a crash. It’s barely even a correction. 9 of the big 20 cities tracked by Case-Shiller saw increasing prices, and the pace of price declines in cities like SFO and PHX slowed dramatically.
Competition returns
In a recent survey, 82% of respondents said they felt ‘locked-in’ by their low mortgage rates and so were unlikely to sell. That’s a big reason why the inventory of existing homes is so low. But demand remains high, and that’s why we’re seeing more competitive bids and a greater % of sales happening above the listing price. It’s also why new home sales surged 10% MoM in March!
Rate relief ahead?
The economic newsflow was more bad (recession red flags) than good, and that helped push average 30-yr mortgage rates back down to 6.5%. The market still expects another +25 bps increase in short-term interest rates from the Fed next week. As we approach summer, however, the trend in inflation (and therefore mortgage rates) should be notably lower.
Bottom Line
Overall, an encouraging week for the real estate market, with national home prices rising month-over-month in February, according to both Case-Shiller and the FHFA. New home sales jumped and competition levels are rising. But the low inventory of existing homes led to lower pending sales.
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