Housing Research Brief

Mild mortgage rate relief brought buyers off the sidelines. Existing single-family home sales hit a 5-month high in February, correlating with a slight retreat in borrowing costs. Mortgage rates have been volatile in the opening portion of 2023, climbing after the Federal Reserve voiced a more aggressive stance, then falling again after Silicon Valley Bank’s demise and the related banking sector turmoil. The average 30-year mortgage rate is nevertheless undercutting last year’s 7 percent peak, hanging in the low- to mid-6 percent range in 2023. This reduction helped drive the recent advance in home purchases. Conversely, fewer people are listing houses on the market amid economic and career uncertainty, alongside the consideration that many owners do not want to trade out their lower rate mortgages. Stronger buying amid weak motivations to sell pushed the for-sale count nationwide to a 9-month low in February. In particular, a lack of entry-level homes on the market is propping up prices and sustaining challenges for prospective first-time buyers.