Current:Home > BackNew home sales jumped in 2023. Why that's a good sign for buyers (and sellers) in 2024.-DB Wealth Institute B2 Expert Reviews
New home sales jumped in 2023. Why that's a good sign for buyers (and sellers) in 2024.
View Date:2024-12-23 23:51:33
So is this bottom in the housing market?
Last week, National Association of Realtors told us that existing-home sales for December and all of 2023 tumbled to new lows. On Thursday, though, the Census Bureau's preliminary report for December showed new home sales jumped 8% from November and grew 4% from 2022 to 2023.
To be sure, new home sales are just a fraction of existing home sales in the U.S., and new homes sales can fluctuate significantly from month to month.
Still, the 668,000 new homes purchased in 2023 ends a two-year decline. It also talks to two key concerns that have bogged down the market struggling with higher mortgage rates: too few buyers and too few homes for sale.
Home sales fall from pandemic highs
Unable to view our graphics? Click here to see them.
Mortgage rates have been central to the housing market's swoon. Since 2022, the number of homes sold began tumbling after the Fed announced its plans to raise interest rates in an effort to tame 40-year-high inflation. That ultimately led to higher mortgage rates and fewer and fewer homes sold.
Freddie Mac offered some more good news for the housing market on Thursday: Mortgage rates remained more than a percentage point below October's recent high. The average 30-year mortgage rate ticked up to 6.69% this week.
How mortgage rates rose as the Fed increased interest rates
A strong open-house weekend
These lower mortgage rates may be having a bigger pschological affect on potential buyers, too.
Denise Warner with Washington Fine Properties has sold homes in the Washington, D.C., metro area for 26 years. She noticed just last weekend a different energy among perspective buyers at her open house.
"I was astonished to see so many people, and the reports from my colleagues were the same," Warner said. "When they had their open houses, they stopped counting" the number of visitors because the homes were so full.
"People may have been waiting to see what happens with interest rates, the general economy, what the Fed is doing," Warner said. "With rates settling in the 6s right now, it's bringing a level of comfort to people."
Real estate association expects a stronger 2024
NAR Chief Economist Lawrence Yun in December predicted an upswing in the housing market. Yun and the NAR aren't expecting the housing market to hit the highs it did in 2020 with interest rates at multi-decade lows. They do expect the market to fall a bit short of 2022's sales at 4.71 million homes.
“The demand for housing will recover from falling mortgage rates and rising income,” Yun said. He said he expects housing inventory to jump 30% because higher mortgage rates caused home owners to delay selling.
NAR has singled out the D.C. market and nine others as the most likely to outperform other U.S. areas because of higher pent-up demand.
Markets NAR expects to perform best in 2024
New home prices fell in 2023
Another encouraging sign for buyers in Thursday's new home sales report: an overall decline in sale prices in 2023. The average price of a new home fell 5.3% to $511,100 while the median sales price fell 6.6% to $427,400.
How home sale prices increased after the pandemic
Mortgage rates contributed the most to new home buyers' monthly mortgage payments in recent months. But, the median sales price for all types of home have crept up by thousands of dollars each year since the pandemic.
The NAR found this fall that U.S. homes hadn't been this unaffordable since 30-year mortgage rates hovered around 14% in 1984.
veryGood! (7258)
Related
- These Yellowstone Gift Guide Picks Will Make You Feel Like You’re on the Dutton Ranch
- Being HIV-positive will no longer automatically disqualify police candidates in Tennessee city
- Love Is Blind’s Matthew Duliba Debuts New Romance, Shares Why He Didn’t Attend Season 6 Reunion
- Being HIV-positive will no longer automatically disqualify police candidates in Tennessee city
- Kevin Costner says he hasn't watched John Dutton's fate on 'Yellowstone': 'Swear to God'
- About 2,000 migrants begin a Holy Week walk in southern Mexico to raise awareness of their plight
- Kansas considers limits on economic activity with China and other ‘countries of concern’
- Missing workers in Baltimore's Key Bridge collapse presumed dead | The Excerpt
- DWTS’ Sasha Farber and Jenn Tran Prove They're Closer Than Ever Amid Romance Rumors
- Ex-Diddy associate alleges arrested Brendan Paul was mogul's drug 'mule,' Yung Miami was sex worker
Ranking
- Cruel Intentions' Brooke Lena Johnson Teases the Biggest Differences Between the Show and the 1999 Film
- Ghost preparers stiff you and leave you with a tax mess. Know the red flags to avoid them.
- 2 high school wrestling team members in West Virginia are charged with sexual assault
- Steward Health Care strikes deal to sell its nationwide physician network to Optum
- Mike Williams Instagram post: Steelers' WR shades Aaron Rodgers 'red line' comments
- Ruby Franke’s Estranged Husband Kevin Details How She Became Involved in Extreme Religious Cult
- Robotic police dog shot multiple times, credited with avoiding potential bloodshed
- Trader Joe’s upped the price of its bananas for the first time in decades. Here’s why
Recommendation
-
Missouri prosecutor says he won’t charge Nelly after an August drug arrest
-
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Middle of the Road
-
Former correctional officer at women’s prison in California sentenced for sexually abusing inmates
-
Suspect in 3 Pennsylvania killings makes initial court appearance on related New Jersey charges
-
Beyoncé course coming to Yale University to examine her legacy
-
Sweet 16 bold predictions forecast the next drama in men's March Madness
-
Interior Department rule aims to crack down on methane leaks from oil, gas drilling on public lands
-
Garrison Brown's older brother Hunter breaks silence on death, Meri discusses grief