{"id":156872,"date":"2023-08-14T18:14:58","date_gmt":"2023-08-15T00:14:58","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=156872"},"modified":"2023-08-14T18:14:58","modified_gmt":"2023-08-15T00:14:58","slug":"the-housing-market-is-stuck-in-limbo","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo","title":{"rendered":"The Housing Market is Stuck in Limbo\u2014Here&#8217;s Where it Could Be Going"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The real estate market has been all over the place lately. On the one hand, home prices have fallen year over year, while the number of homes for sale declined in July, according to Realtor.com\u2019s latest housing data. Still, prices of homes remain near record highs, while mortgage rates have steadied slightly but are still hovering in the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.freddiemac.com\/pmms\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">6% to 7% range<\/span><\/a><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Some economists think that the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-129\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">housing market<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;may be stuck in the in-between, with prices still rising despite an overall yearly decline coupled with a decline in inventory.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">So, what does that mean for real estate investors and the market overall?\u00a0<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_64dac33931295: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_64dac33931295\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Are Real Estate Prices Still High?&nbsp;<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">While the national median listing price declined slightly in July, mortgage rates have kept purchasing costs high, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/research\/july-2023-data\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Realtor.com\u2019s July housing report<\/span><\/a><span data-preserver-spaces=\"true\">. The national median list price dropped to $440,000 in July from $445,000 the month prior. It\u2019s also down 2% from a record high of $449,000 in June 2022.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">But just because prices have dropped slightly, buyers haven\u2019t felt much relief. That\u2019s because mortgage rates have increased the monthly cost of financing a home by 17.5% compared to a year ago. This has outpaced both wage growth and inflation and has made it difficult for first-time homebuyers to afford to buy.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cHigh costs continue to be a stumbling block for some buyers, weighing overall demand,\u201d Realtor.com chief economist Danielle Hale said in her&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.realtor.com\/research\/weekly-housing-trends-view-data-week-july-22-2023\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">analysis<\/span><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">And with the Federal Reserve raising rates in July, it\u2019s likely it contributed to mortgage rates staying steady. However, the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/traders-bet-fed-rate-hikes-are-over-cuts-start-2024-2023-08-10\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Fed has signaled<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;it\u2019s unlikely to increase rates again in 2023, so whether that will cause some relief for mortgage rates has yet to be seen.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Another factor driving home prices? The limited number of sellers on the market. With&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/redefining-what-a-balanced-market-is\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">inventory<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;falling, it\u2019s led to \u201cpricing power\u201d for sellers, Hale said.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cWith mortgage rates still high and buyers cost-sensitive, the limited number of sellers on the market may be sensing their advantage and pricing accordingly,\u201d she said.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Housing Stalemate<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Housing inventory is also down, with new listings in the 50 largest metro areas in the U.S. falling 12% compared to last year and 46% below pre-pandemic levels. And while the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/MSACSR\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">supply of new homes<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;has risen slightly, it\u2019s still slumped year over year.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">With fewer homes, high real estate prices, and increasing mortgage rates, it means housing sales are stagnating. The typical home spent 45 days on the market in July, 11 days more than the same time last year.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Still, homes are being sold faster than before the pandemic. Hale says it\u2019s possible that this could change in the coming months, and homes start selling faster than they were a year ago.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cIf so, that would mean that the market is settling into an in-between state, where homes sit on the market for fewer days than pre-pandemic but somewhat longer than was common during the height of the real estate frenzy,\u201d she said.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Where Is the Real Estate Market Heading?&nbsp;<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">So where is the real estate market headed? It\u2019s impossible to tell the future, but some real estate experts have made a few predictions.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/2023-housing-market-mid-year-report\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Dave Meyer<\/span><\/a><span data-preserver-spaces=\"true\">, for example, thinks that the housing market will end the year mostly flat, or somewhere between 3% and -3%, due to a lack of economic incentive to sell. And with mortgage rates staying at their current rates, it\u2019s likely that demand for housing will continue to stay flat as well. We\u2019re seeing this flatness now with a decline in mortgage applications.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Of course, it\u2019s possible prices decline steeply if there\u2019s a massive shift in the economy, such as increased layoffs and unemployment, or if mortgage rates suddenly skyrocket due to rising bond yields. Another scenario is that housing prices continue to jump if the Federal Reserve pauses rate hikes and mortgage rates drop.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Overall, the housing market is expected to stay strong for the next few years, with&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.zillow.com\/research\/june-2023-home-value-sales-forecast-32768\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Zillow forecasting<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;prices will continue to rise due to a low housing inventory.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line&nbsp;<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Although housing prices have declined slightly in the last few months, rising mortgage rates have kept demand for real estate down. With inventory down as well, housing sales have stagnated and remain on the market longer than in 2022.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">While we have yet to see what the means for the future of the real estate market, it&#8217;s possible that prices will stagnate but remain strong in the coming years.\u00a0<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_04c133a06e33e9dbde87eec3018ef5fd\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_efaea956ae2c41820da75bccd905a30f\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_9e1aac4b34428218399552ff55b6c4b0 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/the-housing-market-is-stuck-in-limbo&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Housing data is all over the place, with many forecasts contradicting each other. Here&#8217;s a clearer picture of where things stand.<\/p>\n","protected":false},"author":613681,"featured_media":155882,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-156872","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/156872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613681"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=156872"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/156872\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/155882"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=156872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=156872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=156872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}