HUD Articles

The demand for mortgages as compared to a year ago is down 41% and the refinance is also down 84%.  At the same time housing prices are higher than the same period a year ago.  According to Forbes.com experts believe the rates will continue to climb overall while some areas might see a decline in prices.  They expect the year of 2023 to be a poor year for the real estate market with a larger recovery coming in 2024. 

With interest rates continuing to climb higher, a potential recession looming ahead, the demand for housing has slowed.  The national average mortgage interest rate for a 30-year traditional mortgage is hovering around 6.5%.  This same timeframe a year ago the rate was around 3.2%.  The difference in a mortgage payment at 6.5% 30-year fixed traditional mortgage vs the same loan at 3.2% is roughly $870 a month.  This would be for a home with a purchase price of 550K, 20% down payment and a well qualified buyer.   That’s a large difference in payment for a potential buyer. 

Despite the rates being higher than ideal for potential buyers, Sellers are still looking to get the most money possible for their home.  Since there is a lower inventory than normal Sellers are less likely to negotiate as compared to a more traditional market.  The Covid19 pandemic drastically changed the real estate market and a huge spike in housing prices that hasn’t been seen before.  So, while prices are still higher than pre-pandemic values there are less buyers currently and creating longer marketing times. 

Source – Forbes.com

Jan 2023