Two Keys to Contextualize the U.S. Housing Market
Brandon Grosse
Brandon is our managing real estate broker with experience since 2001 in professional sales...
Brandon is our managing real estate broker with experience since 2001 in professional sales...
While the media headlines are focused on a crashing U.S. real estate market, the truth is much more nuanced with less hyperbole.
Context matters
The reality is that the market is down, but simple comparisons to a sky-high 2021 are amplifying the scale of the decline. Arm yourself with the right data to understand and contextualize this dynamic market.
Monthly home sales are collected and published by the National Association of Realtors (NAR), but historical data beyond 2021 is not easily accessible and rarely included in analyses. With help from NAR, we've published this data in the past - and now we're publishing a direct link to a live chart: U.S. Existing Home Sales.
While existing home sales are down in the second half of 2022, the deviation from historical averages is not nearly as extreme as the drop from last year.
Looking forward: A leading indicator for the future housing market is consumer demand for mortgage loans (specifically purchase loans).
Mortgage Demand
The mortgage demand index shows that purchase demand is at record lows - but just barely (compared to 2014). Furthermore, there is a recent uptick in demand that corresponds to dropping mortgage rates.
The bottom line: The last six months of 2022 have been challenging, and it appears likely that low volumes will continue into 2023.
But it's not as bleak as the news headlines may lead you to believe.
Make your own conclusions - with the right data. The U.S. Existing Homes Sales and Purchase Mortgage Demand are a great start.
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