LK Marketing and Real Estate

2022 was a turbulent year for the US housing market, as inflation, soaring
interest rates and elevated sales prices combined to cause a slowdown
nationwide. Affordability challenges continue to limit market activity, with
pending home sales and existing-home sales down month-over-month and
falling 37.8% and 35.4% year-over-year, respectively, according to the
National Association of REALTORS® (NAR). Higher mortgage rates are also
impacting prospective sellers, many of whom have locked in historically low
rates and have chosen to wait until market conditions improve before selling
their home.

Economists predict sales will continue to slow and housing prices will soften
in many markets over the next 12 months, with larger price declines
projected in more expensive areas. However, national inventory shortages will
likely keep prices from dropping too much, as buyer demand continues to
outpace supply, which remains limited at 3.3 months, according to NAR.
Even if prices fall, many prospective buyers will find it difficult to afford a
home in 2023, as higher rates have diminished purchasing power, adding
hundreds of dollars to monthly mortgage payments.