This year's housing market, plagued by high interest rates, is on track for the lowest number of homes sold in 12 years.

Fannie Mae, the government-sponsored mortgage financing organization, projects total home sales in 2023 to be about 4.8 million, the lowest since 2011, and only slightly higher in 2024 at 4.9 million. The total amount of mortgage originations for 2023 is expected to be about $1.56 trillion, down from what Fannie Mae had originally projected to be $1.6 trillion this year.

And while Fannie Mae is not predicting bigger home-sale declines beyond what it originally forecast, it also doesn't see a big chance of an uptick either.

A recent report from the National Association of Realtors tracks with what Fannie Mae is seeing. Existing-home sales dropped 0.7% in August, and the inventory of unsold homes dropped to 1.1 million — a 3.3-month supply of homes at the current sales pace, the NAR found. A balanced housing market is generally considered to have 6 months' supply.

The median existing-home sale price in August was $407,100, up 3.9% from the $391,700 observed in August 2022.

Zillow Group Inc. also projects a continued increase in home prices despite the current headwinds. The home-sales platform recently forecast a 4.9% increase in home values over the next year — although that's down from the 6.5% increase it projected in July.

Reversal in home prices
While it's a far cry from the massive double-digit home value increases seen during the height of the pandemic, the growth in housing prices reflects a reversal from earlier in 2023.

Data from Redfin Corp. found home prices rose 3% year-over-year during the four weeks ending Sept. 17, and pending home sales were down 13% from a year ago, as homeowners choose to keep the lower mortgage rates they locked in with their previous purchases.

Many buyers are feeling frustrated with the lack of inventory and higher price points, but there are still good investments to be found if you’re flexible and patient. If you’re interested to see what’s available out there give Metrowest a shout today – we’d love to show you around!