12/23/2022 – MetroIntelligence Economic Update by P. DUFFY

MetroIntelligence Economic Update by P. DUFFY

2023 Housing Market Predictions: Gradual Shift Toward Buyers

With over 85% of homeowners paying mortgage rates below 5% (and two-thirds with rates under 4%), home sales will remain muted as long as rates are elevated. More people will delay moving due to this “‘lock-in effect”’ until rates retreat below 5% or prices adjust accordingly. Depending on the area, renters will also be able to claw back more market power in 2023 as historically high levels of new apartments now under construction are completed.



November Leading Economic Index falls again as growth slows

The Conference Board Leading Economic Index® (LEI) for the U.S. decreased by 1.0 percent in November 2022 to 113.5 (2016=100), following a decline of 0.9 percent in October. The LEI is now down 3.7 percent over the six-month period between May and November 2022—a much steeper rate of decline than its 0.8 percent contraction over the previous six-month period, between November 2021 and May 2022. Only stock prices contributed positively to the US LEI in November.



Purchase loan applications fall 3 percent from previous week and 36 percent year-on-year

The Market Composite Index for mortgage applications increased 0.9 percent on a seasonally adjusted basis from one week earlier, with purchase loans falling 3 percent (and down 36 percent year-on-year) and refinance activity rising 6 percent (but down 85 percent year-on-year). The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 6.34 percent from 6.42 percent.


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