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Spring Housing Market Update: Is It Time To Buy A New Home?
Real estate markets constantly change, responding to larger economic forces, but the last few months have roiled the housing industry from coast to coast. For 55-plus homebuyers, the challenges have included volatile home prices &amp; mortgage rates, as well as the effects of inflation on their retirement nest eggs. Let’s see what the housing market update looks like!
What Does The Spring 2023 Housing Market Look Like?
According to many sources, the spring housing market is shaping up to be calm yet competitive. “The spring is likely to mark a turning point,” says Robert Dietz, chief economist of the National Association of Home Builders. “You’re at the low, but you can start to see better days ahead.”
Home sales cooled in the second half of 2022, thanks to rising mortgage rates and an overheated market. As mortgage costs receded from their fall peak, sales returned and rebounded significantly in the first few months of 2023.
“Affordability will still be a challenge for many buyers this year, but sellers who price and market their home competitively shouldn't have a problem finding a buyer,” said Zillow senior economist Jeff Tucker.
Buyers concerned about prices plunging or skyrocketing will be glad to hear that prices are forecast to be returning to a slower, more traditional upward trajectory. Now that conditions have settled down, prospects will return to being motivated to buy a home by life transitions — new job, marriage, new baby, retirement. For sellers such as Baby Boomers, a well-priced, well-marketed home will receive good offers.
Going forward, inflation and mortgage rates will continue to set the tone. Mortgage rates will continue to affect both demand and supply. If rates move lower, more buyers will come into play; if rates hover in the 6% range or above, buyers may put their house hunt on hold.
Some experts think mortgage rates will begin falling in the second half of 2023. (Once the Fed stops raising rates, mortgage rates are expected to dip.) Shmuel Shayowitz, a mortgage lender from Approved Funding in River Edge, NJ, is seeing an uptick in buyers getting pre-approved for loans.
“They’re definitely coming out more aggressively than late last year,” says Shayowitz. “Most are coming in with the expectation that they’ll be able to refinance within 12 to 24 months.”
The big question: Where will home prices go in 2023?
It depends on who you ask and where you live!
Realtor.com® senior economist George Ratiu believes home prices will flatten out to make up for the higher mortgage rates, and that should bring in more buyers in the months to come. “The fact that a large share of buyers cannot afford mortgage payments on homes at the current price means that home prices have to adjust,” he says.
But other experts believe the shortage of homes on the market will keep prices high. The only real consensus among real estate experts is that the status of home prices will vary considerably from market to market.
“Amid fewer new choices on the market and still rising home prices, home shoppers have shown that they are very rate sensitive, only jumping back in the market when rates dip, and so what happens with rates this spring will likely play a strong role in determining whether the housing market bumps along or picks up speed this year,” said Danielle Hale, chief economist at Realtor.com.
We think it’s worth mentioning that at Cornerstone Homes, we have a good selection of Quick Move-in homes. We invite interested 55+ active adults to come see what’s available!
For Empty Nesters, Active Adults, and Boomers Alike, Now Is The Time To Buy!
According to the latest National Association of Realtors (NAR) Home Buyers and Sellers Generational Trends report, baby boomers now make up the largest generation of home buyers, jumping from 29% in 2021 to 39% last year! (Millennials had been the top group of buyers since 2014.) Baby boomers are also leading the way as the largest home seller generation, jumping from 42% in 2021 to 52% in 2022.
So what does that mean? According to the experts, it puts 55+ buyers in the driver’s seat.
“Baby boomers have the upper hand in the home buying market,” says Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. “The majority of them are repeat buyers who have housing equity to propel them into their dream home—be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer and making housing trades later in life.”
PRO TIP: When you work with Cornerstone Homes, you get exclusive access to our Concierge Program Team including our network of lenders who can help you secure your new home with financing that works best for you!
As baby boomers (currently between 59-79 years old and numbering 76 million in the U.S.) reach pre-retirement and retirement age, many are buying more new construction homes, choosing to simplify and downsize to 55-plus communities. This is particularly common among empty nesters.
As the most financially secure homebuyers, Boomers have the power to design and build the ideal homes in the ideal communities in the ideal location. They want safety and convenience (single-level homes, age-in-place features, proximity to family and friends), modern designs, and luxury features. They want communities that will help them live happier, healthier, and more social lives. They want a low-maintenance lifestyle and great amenities and are willing to pay HOA fees for lawn care, snow shoveling, and security, as well as amenities.
Lucky for baby boomers and empty nesters, active adult builders like Cornerstone Homes are trying to keep up with the demand and provide retirees with their perfect homes. Also lucky for them, there are plenty of active adult communities to choose from, in so many different styles and sizes.
In short, it’s a great time for active adults/Boomers/55+ to consider buying a new home!
Contact Cornerstone Today For More Info!
If you’re thinking about making a move, it’s a good idea to keep abreast of the housing market news, especially in the current economic climate. If you are ready to make your move, consider one of our active adult communities. Cornerstone Homes invites you to explore our communities throughout Virginia. Reach out to us and we’ll get you the information you need.