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This post has been republished with permission from Mike DelPrete.
Media headlines are focused on a crashing U.S. real estate market, but the truth is more nuanced with less hyperbole.
Context matters: The reality is that the market is down, but simple comparisons to a sky-high 2021 are amplifying the scale of the decline.
- Arm yourself with the right data — two key charts — to understand and contextualize this dynamic market.
Monthly home sales are collected and published by the National Association of Realtors (NAR), but historical data beyond 2021 is not easily accessible and rarely included in analyses.
- With help from NAR, I’ve published this data in the past — and now I’m publishing a direct link to a live chart: U.S. Existing Home Sales.
While existing home sales are down in the second half of 2022, the deviation from historical averages is not nearly as extreme as the drop from last year.
Looking forward: A leading indicator for the future housing market is consumer demand for mortgage loans (specifically purchase loans).
- This mortgage application data, alongside average mortgage rates, is published weekly by the Mortgage Bankers Association.
The mortgage demand index shows that purchase demand is at record lows — but just barely (compared to 2014).
- Furthermore, there is a recent uptick in demand that corresponds to dropping mortgage rates.
The bottom line: The last six months of 2022 have been challenging, and it appears likely that low volumes will continue well into 2023. But it’s not as bleak as the news headlines may lead you to believe.
Mike DelPrete is a strategic adviser and global expert in real estate tech, including Zavvie, an iBuyer offer aggregator. Connect with him on LinkedIn.
