As inflation and mortgage interest rates ease down this December, the ice cold real estate market of the fall seems to be thawing just a bit. Available inventory of homes on the market is declining faster that we expected — implying slightly more purchases than we expected. At the end of the year inventory always declines of course, but the last two weeks have come in with bigger declines than expected.
If you continue to assume that buyers aren’t buying, then you’d also assume that inventory would decline less than normal in December. But inventory is declining faster than I expected. You could interpret this as good news, or maybe as less dramatically bad news. The market opens up a bit as rates ease back down.
I’ve mentioned that the second-and-third week of January is when we’ll see more meaningful signals for how the 2023 real estate year will look. The thing to keep in mind right now, is these are just a couple data points. They’re pointing a little better. They’re not pointing to the market tanking from here.
The median price of single family homes in the US ticked down to $410,000. That’s down 1.2% this week, which is precisely what’s expected for the third week of December. Home prices will end the year right around $400k. That’ll mean we end the year with 10% home price growth across the country, even though many local markets are way off their peak of pricing. Nationally home prices are still up significantly from last year.
Every week, Altos Research tracks every home for sale in the country. We analyze all the pricing, supply and demand, and all the changes in that data and we make it available to you before you see it in the traditional channels.
Mike Simonsen is the founder and president of Altos Research.