“The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index,” says Craig J. Lazzara, Managing Director at S&P DJI.

“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.

“A lot of sellers who don’t get the price they had hoped for are taking their homes off the market. Many of them have a rock-bottom mortgage rate and figure they can wait to sell,” said Shay Stein, a Redfin real estate agent in the Las Vegas area.

The MBA reports that the national median mortgage payment applied for by purchase applicants increased 2.3% in December 2022, going from $1,920 to $1,964.

“Mortgage delinquency rates continued to post some of the strongest performance in three years in December, as a healthy job market helped borrowers remain current on their payments,” said Molly Boesel, Principal Economist at CoreLogic.

While unemployment and mortgage rates have both dropped recently, unsustainably high consumer spending and inflationary pressures are expected to push the economy into a recession during Q2 of 2023.

According to recent data, the U.S. is short approximately four million housing units, a gap which is only growing, as well as the number of over-burdened renters and owners.

According to newly-released Census Bureau data, more homeowners and renters than ever are cost-burdened, paying more than 30% of their monthly income on rent.

Since the pandemic, the housing market has been tumultuous, to put it lightly. In a new blog post, First American Economist Ksenia Potapov discusses whether this year will follow the same course.

“Homebuyers are starting to feel more confident as mortgage rates tick down closer to 6% than 7% and the overall economy chugs along with surprising resilience, especially in the labor market. Steadily cooling inflation is likely to prevent mortgage rates from jumping back up,” said Redfin Economics Research Lead Chen Zhao.