We take a look at the American property market at the tail end of 2022. We also look at what has happened in 2023 so far, and whether this is the year you should purchase your dream home in the USA.
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How the American property saw out 2022
To get a clear picture of what is happening in today’s property market, let’s have a look at the state of real estate at the end of 2022.
November
By November, according to the National Association of Realtors (NAR), all four major US regions recorded a month-over-month and year-over-year decline in existing home sales. The chief economist at the NAR, Lawrence Yun, said that American real estate “was frozen in November”, likening it to the standstills seen during the pandemic lockdowns. The main cause of this was a rapid increase in mortgage rates, which made housing increasingly unaffordable.
In December, for the first time since May 2022, pending home sales improved…
Additionally, housing inventory was at incredible lows, with 1.14 million listed at the end of November.
Are you looking to buy in America this year?
December
For the first time since May 2022, pending home sales improved, up by 2.5% from November. Lawrence Yun saw this as the result of a decline in mortgage rates assisting the markets in stabilising.
Yet, properties remained on the market for slightly longer (26 days) than they had in November (24 days).
Furthermore, the median existing-home price for all housing types was €366,900. This was an increase of 2.3% from December 2021. Prices rose in all regions, marking 130 years of consecutive months of year-over-year increases.
“it seems that we have already reached the bottom low of sales activity…And with the mortgage rates stabilizing near 6%, we expect the housing market to turn around in 2023…rebound in 2024.” – Nadia Envangelou, senior economist and director of forecasting for the NAR.
Real estate reflections
Real estate specialists, Redfin, have also weighed in on recent changes to the property market.
In cohesion with the data produced by the National Association of Realtors, Redfin citied November as a particular low point.
However, progress is being made, with the number of customers requesting a house tour increasing by 17% since November. Additionally, their data shows that 13% are looking to start the home buying process. Mortgage applications were up by 28%. In Seattle, central Florida and Richmond, VA, bidding wars are starting to take place. Finally, listings that were waiting in November and December are gaining attention.
What kind of property are you looking for in the USA?
For the most part, realtors are finding that the homes that are picked up the fastest are suburban, single-family, key-ready, and competitively priced. If your mind goes: tick tick tick tick to “suburban, single-family, key-ready, competitively priced” – then don’t worry, buying your dream home in America is still possible. It is just advisable that you do some finciancial preparation, so that as soon as you see your dream home, you can act quickly. For this reason, we recommend talking to our partner, Smart Currency Exchange, for free financial advice on organising your money for an overseas purchase.
Alternatively, if you are looking for a property in America that isn’t this, there’s going to be lots on the market. For example, expensive high-end condos just aren’t being picked up. Moreover, for properties that have been on the market for a long time, some people are even having success with offers at under the asking price.
Does 2023 mark the end of low activity?
Are you ready to start your adventure in the USA?
As ever, experts are not too keen to look into their glass ball and tell us what is in store for the American property market. However, Nadia Envangelou, senior economist and director of forecasting for the NAR says that, “it seems that we have already reached the bottom low of sales activity…And with the mortgage rates stabilizing near 6%, we expect the housing market to turn around in 2023…rebound in 2024.” On the other hand, housing inventory has been a problem since 2008, when construction dried up, and this likely will not recover drastically this year.
Mortgage rates are down, sellers more willing to make concessions, and home prices being more settled – this could all count towards making 2023 feel like the year you buy a home in America.
