August 2023 MBS Highway Housing Index

Seasonal slowdown underway; competition levels much higher than 2022.

MBS Highway’s August 2023 Housing Survey saw nationwide buyer activity levels, upward pricing pressure, and the pace of sales all ease for the third-straight month. This reflects both normal seasonality and the influence of 7%+ mortgage rates and low inventory levels. That said, the residential real estate market is much more competitive than at the same time last year. And the Mid-Atlantic, Northeast and Midwest regions remain hot.

55% of nationwide respondents in August 2023 characterized their local buyer activity as ‘Very Active’, ‘Somewhat Active’, or ‘Steady’. That’s the third month of decline (from 56% in July 2023 and 64% in June 2023). However, the figure in August 2022 was a very similar 53%, suggesting a seasonal influence.

In August 2023, 46% of nationwide survey respondents said that homes were ‘Selling Quickly with Multiple Offers’ in their area. While that is down from 54% in July 2023 and 55% in June 2023, that same figure was only 20% in July 2022. Reasonably-priced homes are selling very quickly.

While upward pricing pressure eased in August 2023, the trend remains very strong. 43% of nationwide respondents reported ‘Moderate’ or ‘Significant’ price increases in August 2023, versus only 28% reporting price reductions. In July 2023, those figures were 47%/21%. For comparison, in August 2022, only 16% of national respondents were seeing price increases, while 58% were seeing price decreases.

The regional results were highly varied — driven by local supply factors and relative affordability. While buyer activity declined nationwide, it rose in the Mid-Atlantic, Northeast, Midwest, and West regions. The Mid-Atlantic was the sole region that saw a month-over-month increase in both upward pricing pressure and the pace of sales. While 80% of Mid-Atlantic region respondents said that homes were ‘Selling Quickly with Multiple Offers’, only 28% of respondents in the Southwest and Southeast said the same.

“The seasonal slowdown is underway, but it probably doesn’t feel like that if you’re a homebuyer facing limited inventory, high competition levels, and rising home prices,” said Barry Habib, MBS Highway Founder and CEO, “Mortgage rates will eventually follow inflation lower, improving buyer affordability and ‘unlocking’ would-be sellers. But with home prices moving up, don’t forget that there can be a very large ‘cost of waiting’.”