Last Updated on September 12, 2023
The summer of 2022 marked a turning point in the pandemic-fueled real estate market, as inflation and rising mortgage interest rates left many would-be sellers sitting on the sidelines, not ready to forfeit their ultra-low interest rates.
Today, interest rates in the 6 percent range have become the norm, consumer confidence is up, and inflation is down. Over the past 12 months, we’ve seen a lot of changes. So what can we expect for the second half of 2023?
Rising interest rates have not dissuaded buyers; rather, it’s sellers that are causing the housing inventory bottleneck.
Exchanging low interest rates for higher ones is a tough tradeoff. Sixty-five percent of homeowners are sitting on a mortgage interest rate of less than 4 percent, and 92 percent of homeowners have an interest rate of less than 6 percent.
We’re not going to see much inventory relief any time soon. Seller hesitancy, more and more Americans aging in place, and a lack of affordable housing will continue to create an inventory challenge. I expect a lift in new home inventory, though, as builder confidence and builder sales are picking up.
Unfortunately, interest rates are not going to move dramatically in 2023. The second half of this year will be better than last year, when inflation and interest rate challenges disrupted the marketplace.
Regionally, the Carolinas have been somewhat insulated from dipping home sales prices as in-migration, a thriving economy, and the proximity to the mountains and the beach continue to make North and South Carolina very desirable places to live.
While higher interest rates present an affordability issue for some buyers, this issue has not flipped the market from a seller’s market to one favoring buyers. To that end, simple supply and demand will continue to dictate home prices. Homes that are priced correctly for the market and in good condition will continue to receive multiple offers, and in many cases, offers over asking price.
Is now a good time to sell?
In closing, it’s still a great time to sell, as homes priced right will go quickly and often for over asking price. If you’re sitting on the sidelines waiting to buy, the most affordable time to buy a home is right now, as home prices are not going to go down anytime soon.