Overall, the December 2022 real estate scene leaves much to be desired as the year comes to a close. Despite dropping over the last few weeks, higher mortgage rates continue to heavily impact mortgage application volumes. Currently, mortgage application volumes remain near the lowest levels in 25 years.
According to the latest data from the Mortgage Bankers Association (MBA), purchase applications plummeted 40% from last year at this time. Furthermore, refinance applications plunged a shocking 86% from one year ago. To date, the average loan size for homebuyer applications fell to $387,300, the lowest level since January 2021.
Existing Home Sales Fall for the Tenth Month in a Row
Heading into the December 2022 real estate market, sales of existing homes fell for the tenth straight month. Hurt by higher mortgage rates, existing home sales have now dropped to the lowest level since 2010. More so, existing home sales declined 35% lower than last year at this time.
On the upside, inventory levels rose a little higher than a year ago. However, inventory levels remain at just a 3.3-month supply nationally. This statistic falls far below the 6-month supply typical in a balanced market. While the median existing-home price of $370,700 climbed 4% higher than a year ago, this dropped from a record high of $413,800 in June.
Limited Home Inventory Plagues December 2022 Real Estate Market
For years the United States has been in desperate need of additional home inventory. Despite the ongoing issue, the December 2022 real estate market doesn’t appear to have much of a solution. Holistically, higher prices for land, materials, and skilled labor continued to hold back builders.
In November, single-family housing starts decreased 4% from October to the lowest level since May 2020. Single-family building permits, a leading indicator, fell 7% from October. Also, single-family building permits dropped 30% lower than a year ago.
Looking Towards Potential Improvement in December 2022 Real Estate Figures
As a final note with November’s data, the NAHB released its home builder sentiment survey. Unfortunately, sentiment dropped for the twelfth straight month to 31, well below the equilibrium of 50. Conclusively, this marks the lowest reading since 2012.
Despite the drawback, mortgage rates declined substantially towards the end of the year. With the December 2022 real estate figures coming out next month, this offers a glimmer of hope for improvement.
For insight on the latest real estate market data, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.
Information accredited to MBSQuoteline.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.
- If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash their hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients to do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.