The Super Bowl is later this week.  Shortly after the end of the NFL season ends, Major League Baseball spring training starts.  At the same time, the spring home purchase season starts to kick into gear.

Many potential home sellers, prefer to have their homes listed on the market toward the end of the winter.  By doing so, the property is on the market and the weather starts to improve.  As with all markets, the real estate market is local.

In some areas of the country, the weather is pleasant year-round.  Seasonality has less impact in places such as Southern California and South Florida.  That being said, the weather is not the only factor in the spring market.  A decent number of potential home buyers prefer to shop for a home in the Spring and early Summer.  Doing so allows them to settle later in the Summer and enroll their children in school for the start of the year.

Will Mortgage Interest Rates Impact The Spring Season?

Mortgage rates spiked throughout 2022.  Those rates started to move up in the first quarter of 2022 and continued to rise throughout the year.  The rapid rise in rates and overall inflation cooled the housing market.  As the year progressed, and the economy continued to turn for the worse, at times and in some markets housing came to a screeching halt.

Mortgage Rates Take A Turn For The Better in 2023?

Late In the fourth quarter of 2022, mortgage rates settled.  At the very end of the year, mortgage rates begin to drift slightly lower.  As we moved into 2023, mortgage rates dipped.  Mortgage rates fell throughout January.  Rates continued to dip into February.

In 2021, the thirty year fixed rate was as low as 2.69% apr.  By late 2022, the 30 year fixed rate moved up into the 7.125% apr range.  Now that we are in early 2023, the thirty year fixed rate is now in the 5.5% apr range.  Some economists anticipate rates will fall further later in the year.

Economic Green Sprouts

As mortgage rates drop and overall inflation falls, Americans are feeling more positive about the economy.  Unemployment remains low.  People are feeling better overall about thier overall economic outlook, both potential sellers and buyers and heading back into the real estate market.

Is Inventory Still An Issue?

Although, the economy is looking up and home buyers are coming back to the market, there is still an issue with low housing inventory.  At times during 2021 and 2022, the housing market has seen record low housing inventory.  In 2023 we are still facing low housing inventory.  The low inventory is one of the big factors holding back the purchase market.

Potential buyers are beginning to come out of the woodwork.  Although mortgage rates are higher than where they were in 2021 they are still low compared to overall historic rates.  If inventory starts to pick up in the spring, it may take a year or more to move back to historical norms, it will be a big boost to the housing market.  It will also make it a great time to purchase a home.