Housing Market Forecast 2023-24: The Myth Of Massive Underbuilding

Six months ago I predicted that home prices would fall, the number of houses sold would decline, and new construction would drop. Since then, home prices have come down a little, on average, but not too badly. The number of home sales is definitely way down. And the latest data on housing construction show that single family housing starts are well below six months ago’s level and much lower than a year ago. Those are national figures, with local markets ranging above and below average.

Mortgage rates have fallen since October 2022; from 6.90% to 6.27% most recently. They dropped on expectations that the Fed will stop raising short-term interest rates. The small decline in mortgage rates prevented a steeper drop in home prices.