October Housing Market Update 2022 | What You Need To Know
Mortgage Rates Continue To Rise
As you can see above interest rates, have been on the rise since the beginning of the year, doubling where they started in January 2022. And most recently rates have increased every week for the past six weeks. Rates are now just over 7% at the time of this post.
Where will they stop? No one knows for sure, but higher rates do seem to be in the cards as inflation concerns continue to persist.
Housing supply and demand changing quickly
As interest rates rise buyer demand has and will continue to decrease while inventory levels will rise. In the data above we are looking at a year-over-year decrease in showing activity by 12.2%. And a rise in active listing activity by 26.9%.
Both of these data points are on a national level and may vary by market and neighborhood.
San Antonio New Listing Inventory
Shifting our focus back home to San Antonio, more sellers are bringing their single-family homes to the market than in the past two years. This year 2.8% more new listings entered the market than in 2021. This is not a huge increase, but it is some progress home buyers can take some comfort in.
San Antonio Active Home Listings Increase
When it comes to ‘Active Listings’ we have seen a 17.6% increase from last year. This points to more home buyers’ demand softening as homes stay on the market past the 10-day new listing status.
However, if we look back to 2020, we can see that active listings were still higher than they are now, and 2020 was also a very strong sellers’ market.
San Antonio Pending Home Sales Decline
San Antonio pending home sales are now showing some softening as higher rates and elevated home prices make it harder for homebuyers to cross the finish line. As of September 2022, we are now down 8.7% in single-family homes pending sales year over year.
Home Price Forecast for 2023
As interest rates have continued to rise in response to persistent inflation, forecasts for price appreciation have continually softened on a national average. This month one of six market experts Zelman has gone into a negative appreciation forecast stance.
With all six forecasts in mind, an average appreciation rate of 1.8% is now the national average for 2023. Will this hold up? Only time will tell. If the fed suddenly reverses course and cuts rates, the forecast could rise. If the fed continues increasing rates appreciation may continue to decline.
Who Is Driving Up The Price Of Homes In San Antonio
Those of you wondering who is driving up the price of homes in San Antonio. You may find a clue on Redfin’s site search data. For me, Los Angeles is no surprise, but I was surprised to see Austin so far ahead of the search inquiries. To understand why our prices in San Antonio have gone so far up and may continue to experience positive price appreciation in the future, a simple comparative home search in each of the cities above reveals much of the motivation.
So long as the pricing of comparable homes in other markets remains elevated above San Antonio, we will continue to attract buyers.
Bottom Line
Yes, the market is softening and may soften further as interest rates potentially rise above current levels. But when comparing San Antonio to other markets, we continue to come out ahead in affordability. And as long as we come out ahead in affordability, we are more likely to experience positive appreciation growth ahead or not as much softening as other areas.
If you’re ready to make a move let’s connect!
Krishna Perkins