The latest reports from the National Association of REALTORS® (NAR) reveal positive signs of recovery in the housing market. Median existing-home sales prices reached their second-highest levels in two decades in June, and pending home sales rose by 0.3% after a four-month decline. However, the market still faces challenges due to historically low housing inventories, resulting in limited choices, higher prices, and increased mortgage rates for buyers. NAR's Chief Economist, Lawrence Yun, remains optimistic, noting that homebuilders are increasing production and hiring to meet growing demand.
Housing inventory remains at critically low levels, down 13.6% from last year. The scarcity of homes for sale has led to 76% of existing homes being sold within a month. Despite these challenges, Yun predicts that the recent surge in mortgage rates may stabilize, offering some relief to potential homebuyers. If mortgage rates decline, NAR forecasts a rush of buyers later this year and into the next.
NAR's market forecast projects a 12.9% decline in existing-home sales in 2023 compared to 2022, followed by a 15.5% increase in 2024. Median existing-home prices are expected to remain relatively steady, while new-home sales are anticipated to rise by 12.3% in 2023 and another 13.9% in 2024. Housing construction, however, is forecasted to decline in 2023 by 5.2% before rebounding in 2024 with a 5.4% increase.
The housing market's regional performance varied, with pending home sales down by 15.6% in June compared to the previous year. However, there were month-over-month increases in contract signings in the Northeast and Midwest while the South and West experienced declines. Despite these regional fluctuations, all four major U.S. regions witnessed year-over-year decreases in transactions in June.