by Mike Tubbs, Quantitative Portfolio Analyst, with Lauren Rosales-Shepard, Content Writer
House prices have surpassed their previous peak back in June 2022, and the normalization of home price appreciation has continued to outperform many market and expert expectations. Real wage growth has shown a sharp uptick as a result of the Fed moving closer to its target, and we can see that demand remains very strong for housing as vacancy rates remain extremely low. However, rising mortgage rates continue to constrict housing supply. The current supply deficit is continually increasing, and it appears that the impact of higher rate hikes has deterred supply more than demand. Higher financing rates are reducing listings, which enables prices to appreciate despite aggressive monetary policy tightening.
Read more about each of these factors and their respective impacts on the housing market as 2023 comes to a close here