The general pulse of the US economy seems optimistic in recent days. With vigorous consumer spending and the Consumer Price Index (CPI) inching nearer to the Federal Reserve’s aimed inflation figures, the economic environment suggests stability ahead. However, when it comes to the housing market, the broader economic trends might not necessarily dictate the pace.
Based on recent analyses, the housing market is expected to remain steady regardless of broader economic swings. The key takeaways are:
Current projections indicate that the total home sales could be around 4.90 million units in 2023. This figure, if accurate, would represent a decline of 13.6% year-over-year, aligning with some of the lowest sales figures in recent years. Yet, optimism persists for 2023, with a slight projected growth of 0.6% to 4.93 million units.
In terms of home loan originations, the prediction stands at approximately $1.60 trillion for this year. Looking ahead, 2023 might see a rise to $1.92 trillion, marking an optimistic shift from previous expectations.
Concerning the looming question of a potential recession, predictions lean towards a mild economic downturn by next year. As Doug Duncan from a leading economic institution aptly pointed out, “Never underestimate the US consumer. Even with financial challenges like increasing credit costs and reduced savings, the consumer spending spirit remains undeterred, thanks in part to diminishing inflation. However, we can’t ignore the implications of a stricter monetary policy.”
Loanguru Mortgage Insights Team
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