July 2023 MBS Highway Housing Index

Buyer activity slows on low inventory, but competition levels remain high

July 2023 marked the second month of slowing (but still elevated) levels of buyer activity. With average 30-year mortgage rates moving above 7% during the survey period, and inventory levels failing to grow during the spring selling season, this comes as no surprise. That said, demand remains robust, as evidenced by high levels of competition and upward pricing pressure in most regions. Notably, the hard-hit West region has seen a dramatic recovery.

Note: This is our 13th month of survey data. As such, we’re able to make year-over-year comparisons for the first time. This is important because we do not seasonally adjust the responses. Keep in mind, however, that June/July 2022 saw home prices and competition levels peak in most markets.

56% of nationwide respondents in July 2023 characterized their local buyer activity as ‘Very Active’, ‘Somewhat Active’, or ‘Steady’. That’s the second month of decline (from 64% in June 2023 and 72% in May 2023). It’s also below the 66% seen in July 2022 — our first month of the survey. But demand isn’t the problem. Availability (inventory) and affordability (mortgage rates) are the real issues.

In July 2023, 54% of nationwide survey respondents said that homes were ‘Selling Quickly with Multiple Offers’ in their area. While that is down from 55% in June 2023 and 59% in May 2023, that same figure was only 37% in July 2022. Well-priced homes are finding buyers quickly.

While upward pricing pressure eased slightly in July 2023, the trend remains exceptionally strong. 47% of nationwide respondents reported ‘Moderate’ or ‘Significant’ price increases in July 2023, versus only 21% reporting price reductions. That balance was 48%/22% last month and was 33%/41% in July 2022.

The Northeast region was the ‘triple crown’ winner, with the highest % of respondents seeing active buyers (63%), upward pricing pressure (75%) and a rapid pace of sales (81%). However, the Midwest and Mid-Atlantic regions weren’t far behind. In many cities in these three regions, active inventory is down 60–80% relative to pre-pandemic.

It’s worth highlighting the dramatic recovery in the hard-hit West region (which includes California and Nevada). 55% of respondents saw upward pricing pressure in July 2023, a survey record for that region. And 65% of respondents said that homes were selling ‘Quickly, with Multiple Offers’, also a survey record.

“I want to thank all of our customers for supporting the MBS Highway Housing Survey over the last year. Our goal for the survey was to capture and synthesize the real-time views of on-the-ground industry experts nationwide — to make it your survey as much as ours. Thanks to your monthly contributions, we’ve achieved this and more, with the survey identifying inflection points early and accurately,” said Barry Habib, MBS Highway Founder and CEO.