Despite mortgage rates set to hit a 20-year high in 2023, real estate agents are optimistic this year will improve. According to the National Association of Realtors, about 4 million homes were sold nationwide in 2023, compared to the usual 5.5 million. Interest rates have been falling since October and this trend is expected to continue. “Interest rates are in the mid-to-high 7% range, and I think people who came from 3% for two and a half years in 2020 were shocked by mortgage rates,” David Onufer said. Onufer, who will be president of the Metropolitan Pittsburgh Association of Realtors in 2024, said mortgage rates are falling. At present, it is approximately 6.6%. “If you look at the trend in interest rates, I think they're already down to the mid-to-low 6% range,” he said. “We expect the Fed to cut rates further at its next meeting, which would push them further down.” The bad news is that they probably haven't cut rates as much as you'd hoped. Onufer said he doesn't expect rates to be around 3% anytime soon. Before Melissa Dishon recently closed on her West Mifflin home, she was thinking about mortgage rates and home prices. “So we were watching and we knew this policy wasn't going to be great. (We) did some research and found that interest rates could go down or they could go up. But we can change. The advice we got from real estate agent Haldis Larsen: “Refinancing is always an option,'' Larsen said. During their search, the market was competitive. “One of the houses we were really interested in was a nice, beautiful house on a dead-end street,” Dishon said. A real estate expert says inventory is still low, saying, “It was sold before I even saw it.'' Homeowners have no incentive to sell their homes because mortgage rates are so high. “So I think this really shocked the market. And people were a little bit shy about walking away from those kind of interest rates and walking away from homes that were probably already profitable, and they… I didn't want to be involved in making a big profit and needing to take out a mortgage on a new home,'' Onufa said. Onufer said Pittsburgh home prices will rise 4% in 2023, with the typical average sales price for a single-family home in the metro being $230,000 to $240,000. As for this year, Onufer said, “Depending on what happens with inventories, it may continue to be flat or it may continue to increase a little bit.” “Obviously, our expectation is that this interest rate will spur inventory growth and help smooth out prices.”Pittsburgh home sales were down about 13% in 2023 from the previous year. That was about 16%, and national sales were down about 18%,” Onufer said. As spring approaches, real estate experts remain hopeful.
Despite mortgage rates set to hit a 20-year high in 2023, real estate agents are optimistic this year will improve.
According to the National Association of Realtors, about 4 million homes were sold nationwide in 2023, compared to the usual 5.5 million. Interest rates have been falling since October and this trend is expected to continue.
“Interest rates were in the mid-to-high 7% range, which I think shocked people because mortgage rates in 2020 were 2.5 years and 3%,” David Onufer said.
Onufer, who will be president of the Metropolitan Pittsburgh Association of Realtors in 2024, said mortgage rates are falling. Currently, it is around 6.6%.
“Based on the current state of interest rates, I think they have already fallen to around mid-6 to low-6,” he said. “We expect the Fed to cut rates further at its next meeting, and we hope that will lead to further rate cuts.”
The bad news is that it probably hasn't decreased as much as you'd expect. Onufer said he doesn't expect rates to be around 3% anytime soon.
Before Melissa Dishon recently closed on her West Mifflin home, she thought about mortgage rates and home prices.
“So we were watching and we knew this policy wasn't going to be great. (We) did some research and found that interest rates could go down or they could go up. “But we can change it. From a financial standpoint, it would have been better to find the housing we wanted at an affordable price,” she says. I did.
The advice she got from real estate agent Haldis Larsen: “There's always the option of refinancing,” Larsen said.
While they were conducting their research, the market was competitive.
“One of the houses we were really interested in was a nice, beautiful house on a dead-end street,” Dishon said. “It sold before we even saw it.”
Real estate experts say inventory is still low. Homeowners have no incentive to sell their homes because mortgage rates are so high.
“So I think this really shocked the market. And people were a little bit shy about walking away from those kind of interest rates and walking away from homes that were probably already profitable, and they… I didn't want to be involved in making a big profit and needing to take out a mortgage on a new home,'' Onufa said.
Onufer said Pittsburgh home prices will rise 4% in 2023, with the typical average sales price for a single-family home in the metro being $230,000 to $240,000.
As for this year, Onufer said, “Depending on what happens with inventories, it may continue to be flat or it may continue to increase a little bit.” “Naturally, we hope that this interest rate will spur inventory growth and lead to price smoothing.”
Home sales in Pittsburgh in 2023 are down about 13% from the previous year.
“Our performance was slightly better, with state sales down about 18%, while state sales were down about 16%,” Onufer said.
As spring approaches, real estate experts remain hopeful.
