2023 Q3 Housing Recap
The housing market is echoing a struggling time for home buyers and those with higher-than-normal interest rates continue to climb. Fannie Mae reports show 2023 economics, on a macro level, have had a devastating effect on the housing market and it does not look like the rates will be returning to normal anytime soon.
According to a Fannie Mae’s Home Price Expectations Survey (HPES) poll of over 100 experts across the housing and mortgage industry anticipate home price growth will end at 5.9% in 2023, with prices slowing in 2024 and 2025 totaling 2.4 and 2.7 percent. Current projections are that the average individual can expect the 30-year fixed mortgage rate to settle at 5.7%.
The largest contributors to the change in the market impacting long-term interest rates include demographic trends, fiscal deficits becoming larger, the green energy transition, and even the influence of artificial intelligence.
Another contributor towards an unstable market is the increase of foreclosures since last year. ATTOM reports that lenders began foreclosures on 68,961 U.S. properties in Q3 2023, up 3% from a year ago. The largest areas of foreclosures taking place Illinois, Pennsylvania, New York, and California. Foreclosures are also closing at a higher pace with the previous records showing the average at 770 days, down 36% from 1212 days in quarter two of 2023.
Fortunately, the Fed announced that, if inflation continues its decline, they expect to lower interest rates in three tranches in 2024. Here’s to lower interest rates and increased home sales in 2024!
Happy Holidays !