Homebuyers need more than falling mortgage rates to jump back into the market
A decline in mortgage rates convinced some homebuyers to come off the sidelines.
Mortgage applications are up 28% from early November
Even though homebuyer demand is improving, the number of available homes for sale is still very low, and that is keeping upward pressure on prices
Just 42% of new and existing homes for sale in January were considered affordable for the typical U.S. household
New home construction fell 1.4% in December compared to November and was down nearly 22% from a year ago, according to the Census Bureau
Fewer sellers are putting homes on the market, adding to the supply crunch
Interest rates in the 5% to 6% range aren't enough to offset the bigger problem of limited supply
Part of the reason sellers aren't listing is high interest rates – They don't want to trade in their 3% interest rate for a 6% interest rate
Through the course of 2023, we expect mortgage rates to end the year closer to 5% rather than the 6% where they are today