October 2023 Market Update

Note: Data below from October, 2023 is the most recent from the National Association of Realtors.

Existing-home sales dropped in October, according to the National Association of REALTORS®. Among the four major U.S. regions, sales slid in the Northeast, South and West but were unchanged in the Midwest. All four regions experienced year-over-year sales declines.

Total existing home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – dropped in October, according to the National Association of REALTORS®. Among the four major U.S. regions, sales slid in the Northeast, South and West but were unchanged in the Midwest. All four regions experienced year-over-year sales declines.

NAR October 2023 Existing Home Sales Report Infographic“Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” said NAR Chief Economist Lawrence Yun. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”

Total housing inventory registered at the end of October was 1.15 million units, up 1.8% from September but down 5.7% from one year ago (1.22 million). Unsold inventory sits at a 3.6-month supply at the current sales pace, up from 3.4 months in September and 3.3 months in October 2022.
The median existing-home price for all housing types in October was $391,800, an increase of 3.4% from October 2022 ($378,800). All four U.S. regions registered price increases.
“While circumstances for buyers remain tight, home sellers have done well as prices continue to rise year-over-year, including a new all-time high for the month of October,” Yun said. “In fact, a typical homeowner has accumulated more than $100,000 in housing wealth over the past three years.”
According to the REALTORS® Confidence Index, properties typically remained on the market for 23 days in October, up from 21 days in September 2023 and October 2022. Sixty-six percent of homes sold in October were on the market for less than a month.
First-time buyers were responsible for 28% of sales in October, up from 27% in September and identical to October 2022. NAR’s 2023 Profile of Home Buyers and Sellers – released earlier this month – found that the annual share of first-time buyers was 32%.
All-cash sales accounted for 29% of transactions in October, unchanged from September but up from 26% in October 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in October, down from 18% in September and 16% one year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.44% as of November 16. That’s down from 7.50% the previous week but up from 6.61% one year ago.
Regional Breakdown
Existing-home sales in the Northeast dipped 4.0% from September to an annual rate of 480,000 in October, down 15.8% from October 2022. The median price in the Northeast was $439,200, up 7.5% from the previous year.
At an annual rate of 930,000 in October, existing-home sales in the Midwest were unchanged from the prior month but down 13.9% from one year ago. The median price in the Midwest was $285,100, up 4.2% from October 2022.
Existing-home sales in the South retracted 7.1% from September to an annual rate of 1.69 million in October, a decline of 14.6% from the previous year. The median price in the South was $357,700, up 3.5% from last year.
In the West, existing-home sales decreased 1.4% from the prior month to an annual rate of 690,000 in October, down 14.8% from one year ago. The median price in the West was $602,200, up 2.3% from October 2022.

 

Expert Quotes on the 2024 Housing Market Forecast

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?

The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.

Mortgage Rates Expected To Ease

Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:

“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”

Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”

The Supply of Homes for Sale May Grow

As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”

Home Price Growth Should Moderate

And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:

“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.” 

To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:

“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”

Bottom Line

Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. Let’s connect.

Why You Should Use a Real Estate Agent When You Buy a Home

If you’ve recently decided you’re ready to become a homeowner, chances are you’re trying to figure out what to do first. It can feel a bit overwhelming to know where to start, but the good news is you don’t have to navigate all of that alone.

When it comes to buying a home, there are a lot of moving pieces. And that’s especially true in today’s housing market. The number of homes for sale is still low, and home prices and mortgage rates are still high. That combination can be tricky if you don’t have reliable expertise and a trusted advisor on your side. That’s why the best place to start is connecting with a local real estate agent.

Agents Are the #1 Most Useful Source in the Buying Process

The latest annual report from the National Association of Realtors (NAR) finds recent homebuyers agree the #1 most useful source of information they had in the home buying process was a real estate agent. Let’s break down why.

How an Agent Helps When You Buy a Home

When you think about a real estate agent, you may think of someone taking you on home showings and putting together the paperwork, but a great agent does so much more than that. It’s not just being the facilitator for your purchase, it’s being your guide through every step.

The visual below shows some examples from that same NAR release of the many ways an agent adds value. It includes the percentage of homebuyers in that report who highlighted each of these benefits:

Why You Should Use a Real Estate Agent When You Buy a Home | North Scottsdale Real Estate & Luxury Homes | Team Picarello

Here’s a bit more context on how the survey results noted an agent continually helps buyers in these situations:

  • Helped Buyer’s Understand the Process: Do you know the difference between an inspection and an appraisal, what each report tells you, and why they’re both important? Or that there are things you shouldn’t do after applying for a mortgage, like buying appliances or furniture? An agent knows all of these best practices and will share them with you along the way, so you don’t miss any key steps by the time you get to the closing table.
  • Pointed Out Unnoticed Features or Faults with the Home: An agent also has a lot of experience evaluating homes. They’ve truly seen it all. They’ll be able to pinpoint some things you may not have noticed about the home that could help inform your decision or at least what repairs you ask for.
  • Provided a Better List of Service Providers: In a real estate transaction, there are a lot of people involved. An agent has experience working with various professionals in your area, like home inspectors, and can help connect you with the pros you need for a successful experience.
  • Negotiated Better Contract Terms and Price: Did something pop up in the home inspection or with the appraisal? An agent will help you re-negotiate as needed to get the best terms and price possible for you, so you feel confident with your big purchase.
  • Improved Buyer’s Knowledge of the Search Area: Moving to a new town and you’re not familiar with the area, or you’re staying nearby, but don’t know which neighborhoods are most affordable? Either way, an agent knows the local area like the back of their hand and can help you find the perfect location for your needs.
  • Expanded Buyer’s Search Area: And if you’re not finding anything you’re interested in within your initial search radius, an agent will know other neighborhoods nearby you should consider based on what you like, what amenities you want, and more.

Bottom Line

If you’re looking to buy a home, don’t forget about the many ways an agent is essential to that process. Any hurdle that pops up, a negotiation that needs to take place, and more, your agent will know how to handle it while they make sure to minimize your stress along the way. Let’s connect to tackle this together.

Is Owning a Home Still the American Dream for Younger Buyers?

Everyone has their own idea of the American Dream, and it’s different for each person. But, in a recent survey by Bankrate, people were asked about the achievements they believe represent the American Dream the most. The answers show that owning a home still claims the #1 spot for many Americans today (see graph below):

Is Owning a Home Still the American Dream for Younger Buyers? | North Scottsdale Real Estate & Luxury Homes | Team Picarello

In fact, according to the graph, owning a home is more important to people than retiring, having a successful career, or even getting a college degree. But is the dream of homeownership still alive for younger generations?

A recent survey by 1000watt dives into how the two generations many people believed would be the renter generations (Gen Z and millennials) feel about homeownership. Specifically, it asks if they want to buy a home in the future. The resounding answer is yes (see graph below):

Is Owning a Home Still the American Dream for Younger Buyers? | North Scottsdale Real Estate & Luxury Homes | Team Picarello

While there are plenty of reasons why someone might prefer homeownership to renting, the same 1000watt survey shows, that for 63% of Gen Z and millennials, it’s that your place doesn’t feel like “home” unless you own it – maybe you feel the same way.

That emotional draw is further emphasized when you look at the reasons why Gen Z and millennials want to become homeowners. For all the financial benefits homeownership provides, in most cases it’s about the lifestyle or emotional benefits (see graph below):

Is Owning a Home Still the American Dream for Younger Buyers? | North Scottsdale Real Estate & Luxury Homes | Team Picarello

What Does This Mean for You?

If you’re a part of Gen Z or are a millennial and you’re ready, willing, and able to buy a home, you’ll want a great real estate agent by your side. Their experience and expertise in the local housing market will help you overcome today’s high mortgage rates, low inventory, and rising home prices to find your first home and turn your dream into a reality.

Working with a local real estate agent to find your dream home is the key to unlocking the American Dream.

Bottom Line

Buying a home is a big, important decision that represents the heart of the American Dream. If you want to accomplish your goal, let’s connect to start the process today.