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The seller’s market that pushed U.S. home prices to record highs in recent years appears to be over. In 2023, you can expect more equilibrium between buyers and sellers, according to Rocket Mortgage CEO Jay Farner and other housing experts.
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In an interview with CNN this week, Farner called it “an even market” between home buyers and sellers right now, with neither holding much advantage over the other.
“A few years ago, it was clearly a seller’s market,” Farner said. “We were doing verified approvals, people were getting a full underwrite within 24 hours to ensure they could present almost like a cash buyer to make an offer on that home. Now, they have a bit more time. They have more homes they can look at … We’re not seeing 15 offers on one home.”
From a seller’s perspective, the housing market has been weakening for some time now. A series of aggressive interest-rate hikes by the Federal Reserve last year pushed mortgage rates higher even as houses remained historically expensive. This combination priced many would-be buyers out of the market and led to a steep drop in demand.
As CNN noted, home sales in November 2022 fell for the 10th month in a row — the longest such streak since 1999. Even before then, back in August, the National Association of Homebuilders (NAHB) said the U.S. was in a “housing recession,” Quartz reported in a recent article titled, “U.S. Housing in 2023 Won’t be a Buyer’s Market or a Seller’s Market.”
The NABH cited a slowdown in home sales, mortgage applications and single-family starts.
“We’re seeing decade-low readings for just about every index that you can imagine for housing,” NAHB chief economist Robert Dietz told Quartz.
That doesn’t mean home prices will suddenly start plunging across the country. NAHB survey data found that about one-third of builders have been decreasing their prices in response to lower demand, but the average price cut is only about 8%. Meanwhile, most builders are either raising or maintaining their prices.
“Sellers were having a hard time coming to terms with how quickly the housing market changed,” Ali Wolf, chief economist at the housing market research firm Zonda, told Quartz. “That slowdown has persisted for six months in many markets across the country. There still are a lot of consumers that want to own a home but are not willing to buy.”
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