Spring Housing Market Predictions 2023

Q: What should we be expecting to see at the start of the second quarter? Will rates continue to fluctuate?

Chris Bennett: Moving into the second quarter, we have better-functioning markets compared to the past 3-6 months. The market is calmer, consumers are becoming more comfortable again, and buyers of mortgage-backed securities are more comfortable. The worst is behind us and we are coming to the end of Fed hikes. If we get another rate hike, we’ll have a hike of 500 basis points over the span of 16 months. 

Q: Although we saw a slight drop in rates from the Silicon Valley Bank failure, should we consider it temporary?

Chris Bennett: After 12 months of aggressive hikes, the Fed’s actions finally broke something, with Silicon Valley Bank becoming the second biggest bank failure ever.  While the Fed doesn’t have to stop tightening or start easing, they may see the bank failures as a sign things have gone far enough.

Q: Should we expect to see home prices lower, and housing inventory start to increase?

Chris Bennett: Inventory is still down, but know it is getting better. Heading into the spring home buying season, there is a lot of opportunity and different ways loan officers can serve their borrowers. Even if Treasury yields stay the same, there is still perhaps 50 basis points of room for mortgage rates to improve from here.

For real estate professionals or buyers and sellers keeping an eye on the spring housing market, the National Association of Realtors releases regular insights into existing home sales and housing supply. Compare price increases year over year or month to month to stay informed this season.

For those looking to sell their homes, renovate or buy a new home this season, the best first step is to connect with your local loan officer.  Whether you are making short-term or long-term plans, your loan officer has access to a diversity of products and programs that fit your financial goals.