Source: Yahoo! News —
The housing market is coming off one of its most challenging years since the financial crisis, but signs of a turnaround are emerging early in 2023, according to Redfin (RDFN) CEO Glenn Kelman.
“The market could still easily falter,” Kelman tweeted this week. “But housing in January has been stronger than anyone could’ve hoped.”
As part of a lengthy Twitter thread posted Wednesday, Kelman acknowledged that in March of 2022, the housing market was “cresting” amid market volatility, still-rising inflation, and war.
At the same time, the Federal Reserve boosted interest rates by a quarter-point, the first time in three years, in an effort to slow high inflation.
Following the Fed’s moves to raise rates — which totaled 4.25% worth of interest rate increases by the time 2022 wrapped up — two years of extreme bidding wars, packed open houses, and sky-high prices finally started to roll over as the housing market cooled.
Sales of existing homes fell 3.4% between April and May, the weakest reading since June 2020, down 8.6% compared to May 2021, according to the National Association of Realtors (NAR). Meanwhile, sales of newly constructed homes dropped 16.6% in April as higher mortgage rates crimped the enthusiasm of buyers, U.S. Census Bureau data showed.
Higher rates challenged both homebuyers, who had to cope with hefty monthly payments, and sellers, who saw demand drop and offers fall off.
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