Sales Rise and Interest Rates Hold

Good news for the housing market—new home sales are on the rise. December marked the second straight month of growth, with sales up 6.7% compared to last year. At the same time, home prices have come down from their peak, making it a little easier for buyers to get in the game.

One big reason for the boost in sales? More affordable new homes are hitting the market. Builders have started focusing on lower-priced homes, giving buyers more options at price points that weren’t available a year ago. And with mortgage rates still bouncing around, a lot of people who were holding off are now deciding it might be time to make a move before prices shift again.

Not everything is moving in a straight line, though. Pending home sales dipped slightly in December, breaking a four-month streak of gains. But real estate isn’t always predictable—some months are stronger than others, and overall, demand is still holding steady.

Home values are also staying strong. Reports show home prices have increased slightly compared to last year, which is good news for both buyers and sellers. If you’re looking to buy, you’re not overpaying like in 2021, but your investment is still expected to grow over time.

So what happens next? I believe a lot depends on things like mortgage rates, inflation, and how many new homes get built this year. The Federal Reserve hasn’t made any big moves on rates yet, but builders are still moving forward with new projects.

If you’ve been thinking about buying, this could be the right time to start looking. With prices adjusting and more homes becoming available, getting ahead of the next shift might put you in a better spot.