From Boom to Balance: The Real Estate Market's Soft Landing

At the start of this year, we confidently predicted that the U.S. housing market would slow down in 2023. Now, looking back, our prediction has come true. The housing market has changed from being really busy and uncertain to being more steady and balanced. Even though there were worries about mortgage rates going up in late 2022, people who wanted to buy houses surprised us by staying strong. This led to fewer houses being available for sale and prices going up again during the year. It's important to note that three out of four ways we measure house prices show good news compared to the year before, which supports the idea that the housing market is slowing down without a big crash.

Even though things like prices going up, people without jobs, and mortgage rates going higher still might cause problems, the information we have now suggests that a big market crash is not likely right now. The prices of typical homes have stayed about the same, and they seem to be going up a bit compared to last year. The soft landing idea is also shown by the prices of new homes that are being listed for sale this year – they're higher. Plus, the prices going down isn't happening as quickly as it did in 2022.

Even though fewer houses are being sold this year compared to last year, this is expected as part of the slowing down process. The number of houses being sold is slowly getting closer to the numbers we saw in 2022. Even though some places might have a harder time, the housing market overall is showing that it can handle challenges and has a good balance between how many houses people want to buy and how many are available.

As we go into the second part of 2023, the data tells us that we'll probably see more houses being sold even though there are fewer available than last year. This makes the idea of a successful slowing down even stronger. Some areas might still have problems, but the U.S. housing market has managed to become more stable, which is really important for the bigger economy.

Data Sourced from: Real Trends