Market Crash or Correction?

We've sliced and diced the latest market updates and predictions as of April 2023 into short bite-sized stats so you can easily leverage these findings when talking to clients and leads. 

1. Interest rates declining 

According to Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), mortgage rates have fallen to 6.27% as of April 13th. "With inflation moving closer to the Fed's 2% target, mortgage rates are expected to decrease further in the coming months, likely below 6% by year's end. Evangelou says "If rates drop to 6%, 3.1 million more households will once again be able to buy the median-priced home compared to the beginning of the year."

2. Downtick in home prices while mortgage applications are on the rise

"The median existing-home sales price decreased 0.2% to $363,000 in February compared to a year ago", according to the National Association of Realtors (NAR).

Subsequently, "mortgage applications increased 5.3 percent from one week earlier", according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 7, 2023.  

3. Record low inventory rates

According to Lawrence Yun, Chief Econimist at NAR, “Inventory levels are still at historic lows... Consequently, multiple offers are returning on a good number of properties.”

By comparison, Sam Khater, chief economist at Freddie Mac, says “Declining rates have brought borrowers back to the market but, as the spring homebuying season gets underway, low inventory remains a key challenge for prospective buyers."

4. Homeowner equity at highest in decades 

Nicol Bachaud, an Economist at Zillow, says “Homeowner equity is at the highest level it’s been in the past several decades, so homeowners have a lot of value in their home, therefore, the likelihood of a market crash is low."

5. No market crash in sight

According to Bankrate, “This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”

What does this mean for buyers?

Buyers are faced with:

• Record-low inventory rates
• Dealing with more multiple offer situations
• Having to place higher offers due to high-priced homes

That said, with interest rates still causing buyers to be reluctant, buyers still have 'purchasing power' and in certain cases, it may be helpful to consider tactics such as requesting a Seller's Concession.

What does this mean for sellers?

With fewer homes for sale, homeowners who are looking to sell have the following advantages:

• Greater chance of receiving multiple offers due to fewer homes on the market
• Higher-priced offers as buyers have fewer choices and more competition
• More interest in their home