In Today’s Email

• Existing Home Sales

• New Home Sales

• Quick Reads

• Executive Summary

Existing Home Sales

Existing-home sales jumped 14.5% in February to a seasonally adjusted annual rate of 4.58 million, snapping a 12-month slide and representing the largest monthly percentage increase since July 2020 (+22.4%).

National Inventory continuing to decline bolsters the real estate observers opinion who consider prices to be relatively stable, and in some markets improving. We see this in the Midwest and Southeast especially where Groundfloor’s existing loans are located.

The median existing-home price for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.

Mortgage demand has increased week over week for the third straight week, and is showing the resiliency of buyers when rates trigger into the mid sixes.

Expect home sales to continue to improve with this positive downward movement of the 30 year Mortgage rate.

New Home Sales

New home sales continued to rise in February, jumping 1.1% from January to a seasonally adjusted annual pace of 640,000 homes, according to data published on Thursday by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD).

“Homebuilders are still feeling cautiously optimistic about a strong spring home buying season, despite mortgage rate volatility and economic uncertainty,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. A key reason for builder optimism is the very low inventory in the existing home market, which will force more buyers into the new home market. The number of existing homes for sale is still less than half of what it was prior to the pandemic. In many markets, buyers are still facing stiff competition, often making offers on multiple homes before successfully purchasing.

The NAHB/Wells Fargo Housing Market index in the US increased for a third month to 44 in March of 2023, a new high since September of 2022 and beating market forecasts of 40. The gauge for current sales conditions rose to 49 from an upwardly revised 47, and traffic of prospective buyers edged 3 points higher to 31, hitting a 6-month high. On the other hand, sales expectations in the next six months fell slightly to 47 from 48. “While financial system stress has recently reduced long-term interest rates, which will help housing demand in the coming weeks, the cost and availability of housing inventory remains a critical constraint for prospective home buyers,” Robert Dietz, NAHB chief economist, said.

Quick Reads Around The Block

• Mortgage demand rises for third week in a row

• Single-Family permits are up over 7% from January

• Jacksonville rents are growing faster than the national average

Executive Summary From PD

“Definitely positive news for the real estate market that both existing and new home sales have shown improvement in February. The increase in existing-home sales after a 12-month slide and the rise in new home sales indicate that buyers are still interested in purchasing homes despite the volatility in mortgage rates and economic uncertainty. The low inventory in the existing home market is forcing more buyers into the new home market, which is good news for builders who are regaining confidence in the market. The median existing-home price for all housing types in February was relatively stable, showing signs of improvement in some markets in the Midwest and Southeast. Overall, this news is promising for the real estate industry, particularly for the South region of the US, as it indicates a market ready to move as it finds balance between buyers' ability to buy and sellers' willingness to sell.”

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