June 2023 MBS Highway Housing Index

Slight slowdown on higher rates, but buyer activity remains high.

MBS Highway’s June 2023 Housing Survey saw a slight pullback in buyer activity — albeit from elevated levels. Higher mortgage rates and low inventory levels are to blame. Demand remains very high, as evidenced by both rising prices and intensified competition nationwide.

64% of respondents in June 2023 characterized their local buyer activity as ‘Very Active’, ‘Somewhat Active’, or ‘Steady’. While that’s modestly down from 72% in May, it remains well above the 22% seen in December 2022. Availability and affordability are the issues for buyers, not the desire to move.

Having reached an inflection point in May 2023, pricing pressure remained clearly upward in June 2023, with 48% of respondents reporting ‘Moderate’ or ‘Significant’ price increases, versus only 23% reporting price reductions. That balance was 53%/19% last month. Keep in mind, however, that in December 2022, only 3% of respondents reported price increases.

The rebound in inventory levels that began in mid-2022 is now sputtering. Monthly new listings during the spring selling season are running 25–30% below last year, and active inventory remains ~50% below pre-pandemic levels nationwide. That helps explain why in June 2023, 55% of survey respondents said that homes were ‘Selling Quickly with Multiple Offers’ in their area. While that is down from 59% in May, that same figure was 5% in December 2022.

Buyer activity levels and upward pricing pressure were strongest in the Mid-Atlantic, Northeast and Midwest regions. In the Mid-Atlantic, an incredible 86% of regional respondents indicated that homes were ‘Selling Quickly with Multiple Offers’. That same figure was 81% in the Northeast region and 78% in the Midwest region. In many cities in these regions, active inventory is down 60–80% relative to pre-pandemic.

Meanwhile, previously lagging regions (Northwest, West and Southeast) are seeing a rapid turnaround in both activity levels and pricing. The West region, for example, had 17% of respondents reporting price increases in June 2023, up from 0% in December 2022.

“Months before the inflection point in activity levels and home prices became apparent to everybody, our loan officer and real estate agent clients saw it coming. That’s the benefit of our nationwide, real-time survey. It’s also a reminder why consumers should trust their local real estate professionals (not the crash-obsessed mass media) for housing advice,” said Barry Habib, MBS Highway Founder and CEO.