Welcome back to my monthly series – “How’s the Market?” This is the August 2022 edition which covers July 2022 data.
OVERALL MARKET PREDICTIONS: Where are we going for the rest of 2022 into 2023
Overall, expect the housing market activity to continue to slow through the second half of 2022 and into early 2023 with adjustments to sales and price. Low inventory will likely continue but supply will increase some.
Home sales are projected to be 10.7% lower in Q3 2022 compared to Q3 2021. In the 4th quarter, sales are projected to be down 5.0% compared to the end of 2021.
In 2023 expect our normal market with its seasonality and the overall number of sales will be flat compared to 2022 (-0.3%).
Home prices will continue to rise. The median price forecasted to be up 6.6% in 2022 compared to 2021. Price growth will be slower in 2023, with year-over-year price appreciation at 2.1% for the Mid-Atlantic. Prior to the pandemic, home prices had been rising by about 3% annually in the region.
INVENTORY
Inventory is up significantly across the Mid-Atlantic – the third month in a row with increasing inventory (year over year), but the first month with rising inventory in all of Bright MLS’ major markets. Inventory is still low though! This is not yet a balanced market. Supply is increasing because of a decrease of buyers in the market, not because of new properties coming on the market.
DC MARKET
Pending sales dropped in almost every local jurisdiction, with Loudoun County (-40%), Prince George’s County (-27%), and Montgomery County (-26%) dropping the most. In DC proper, sales were down 19%.
MARYLAND MY MARYLAND
As always, let’s turn to just Maryland. The number of inventory and pending units are both down. The units sold is down 27%. The average price is up 6.1%. The median price is up 5.4%. The months of inventory/supply is 1.3 months.
An obvious indicator of consumer concern can be seen in the number of new listings in July, with a 25% drop in new listings, 9,898 versus the previous year. The number of showings in this area bears this out.” According to Bright MLS data, showings in the Baltimore Metro market dropped 27.6%, while in the Washington, DC Metro market, showings fell further to 31.5%.”
Craig Wolf, 2022 Maryland Realtors President
MORTGAGE RATES UPDATE
Mortgage Rates as of 8/9/22 were under 5%! This is the lowest rate since April 2022.
Although rates continue to fluctuate, recent data suggest that the housing market is stabilizing as it transitions from the surge of activity during the pandemic to a more balanced market. Declines in purchase demand continue to diminish while supply remains fairly tight across most markets. The consequence is that house prices likely will continue to rise, but at a slower pace for the rest of the summer.”
Sam Khater, Freddie Mac
This was put together for an internal TTRSIR presentation by Guaranteed Rate Mortgage. It is pretty interesting for those who are doing this planning. This assumes some figures that may be changing or not apply to you. Let me know if you want this put together specifically for you and I would be happy to connect you.
Inflation
Inflation for July was 8.5% (down from 9.1% in June). The decrease is mainly due to falling gas prices. The Federal Reserve may not do as drastic a rate change as previously anticipated – maybe 0.5% instead of 0.75%. Both inflation and the Fed’s actions will continue to be something to watch.
Just a quick mention, rent prices are up 5.8% since June in the continuing trend.
Sources:
Bright MLS Housing Market Outlook, Dr. Lisa Sturtevant, July 28, 2022. Web
TTRSIR Internal Meeting Presentation, Aug 10, 2022. Slides provided by GuaranteedRate.
Maryland Realtors, Aug 15, 2022. “Maryland’s July 2022 Housing Statistics: Prices and Interest Rates Rise, Inventory Increases as Other Indicators Suggest Consumer Concern.”
Bright MLS, Dr. Lisa Sturtevant, August 11, 2022. “Inventory rises across all markets.” Web
Urban Turf, August 11, 2022. “The Seesawing of Mortgage Rates Continues.” Web
