5 findings that characterize the housing market today

by Scott Graff

metal key house on wooden table

By: National Mortgage News

The housing market of 2023 looks very different to the one seen not that long ago, when interest rates hit stunning lows. As buyer and seller behavior shifts in reaction to higher interest rates and sour macroeconomic predictions, mortgage originators are wise to observe carefully and reshuffle their strategies to keep winning business. Below we round up a number of findings that could inform those plans.

Buyers and sellers are biding their time

The prospect of a high monthly payment at a lofty interest rate is making buyers think twice about entering the market, while sellers are also backing out of deals.

As a result, the number of homes sold was declining in the fall, down by 25% compare to last year while new listings were also down by 22%, according to a Redfin report.

On the upside, first time homebuyers may benefit from rising rates, as fewer homeowners are likely to plan on moving in this market, giving buyers more time to find the right property andmore power to negotiate the purchase price.

First-time buyers are set to dominate

Young homebuyers looking to enter the market for the first time are gaining the upper hand on existing buyers, despite higher interest rates and increasing home prices.

"While rising mortgage rates are hurting affordability for all buyers, first-time buyers may be less deterred by higher rates because they're comparing a monthly mortgage payment to what they're paying in rent," said Manny Garcia, population scientist at Zillow.

With current homeowners not only held back by rising rates, but also the need to time their purchase to a sale, first-timers now have an additional advantage in their flexibility to buy on their own schedule.

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