Last week’s released housing data reflects a freeze in the real estate market, according to Patrick Carroll, CEO and founder, CARROLL Company.
November’s U.S. housing starts data is continuing to decline and signals how 2022’s surge in mortgage rates has suppressed buyer demand – along with increases in building materials and labor construction shortages, Carroll tells GlobeSt.com.
“The housing market will likely remain weak in the start of 2023,” he said. “We are also expecting the Fed to continue to raise interest rates and mortgage rates will stay at a new elevated level home buyers will have to adjust to.
“While single-family home building continues to fall, there are plenty of opportunities in multifamily as this sector has shown to be resilient this past year and higher mortgage rates will keep renters on the sidelines.”
Carroll finds Atlanta, Dallas, Tampa to be undervalued markets.
“These markets remain strong compared to other parts of the country as we have seen a surge in population growth due to the quality of life, lower cost of living, and business-friendly regulations in these areas,” he said.
The Tipping Point
That US existing home sales have fallen for the 10th straight month – due to high mortgage rates, limited inventory and high home prices – is squeezing potential buyers out of the market.
“Despite the negative data, there are opportunities to buy in the market and those will become clearer as we head into 2023,” Carroll said. “Some of the best deals our company made were completed during previous downturns, so while things will get worse before they get better, we are out there hunting for new deals.”
Carroll said a tipping point to watch for would be the 30-year mortgage rate rising above 6%, an increase in homes for sale, and homes sitting on