According to a recent release from the National Association of Realtors (NAR), pending home sales have just shown an increase in numbers. Specifically, June’s pending home sales had increased by 0.3% overall for the whole country from the month before. While the South and West regions saw slight decreases, the Northeast and Midwest grew.
"The recovery has not taken place, but the housing recession is over," said NAR Chief Economist Lawrence Yun, "The presence of multiple offers implies that housing demand is not being satisfied due to lack of supply. Homebuilders are ramping up production and hiring workers."
The Pending Home Sales Index is a forward tracking of home sales that is based on contract signings and had increased by 0.3% this June. This was the first uptick seen since February this year.
Mortgage Rates
NAR expects that the 30-year fixed mortgage rate will increase to 6.4% this year but then go back down to 6.0% for 2024. "With consumer price inflation calming close to the Federal Reserve's desired conditions, mortgage rates look to have topped out," Yun added. "Given the ongoing job additions, any meaningful decline in mortgage rates could lead to a rush of buyers later in the year and into the next."
Home Sales and Prices
NAR anticipates existing home sales will experience a decline of 12.9% from 2022 to 2023, coming in at 4.38 million, before climbing 15.5%, to 5.06 million in 2024 next year. Compared to last year, the national median existing-home prices will remain steady before rebounding by 2.6% next year, to $395,000. The West, being the country's most expensive area, will see a reduction in home prices while the more affordable Midwest region is likely to see a smaller increase. Housing starts for new construction are expected to drop 5.3% from 2022 to 2023 before increasing 5.4%, in 2024.