According to data from the National Association of Realtors, pending home sales increased for the first time in six months in December 2022. Along with this it also reports that new home sales and mortgage applications are rising.
This has many in the industry asking if the housing market is slowing down. “The recent low point in home sales activity is likely over,” says NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”
The new home market is seeing some progress even with higher construction costs and low affordability.
“Builder incentives and declining mortgage rates during the month of December helped push new-home sales up for the month,” says Jerry Konter, chairman of the National Association of Home Builders.
“The new normal for mortgage rates will likely be in the 5.5% to 6.5% range,” Yun says. “Job gains will steadily become important in driving local markets. The South, in particular, is set to outperform the rest of the country, thanks primarily to better job market conditions in this part of the country compared to other regions.”
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