Earlier this month, MBS Highway surveyed roughly 30,000 mortgage and real estate professionals around the country regarding current housing market conditions. The results for the December 2023 release showed that buyer activity recovered somewhat in December, as the recent 1% fall in mortgage rates coaxed some buyers back from the sidelines. Home prices continued to hold up better than transaction volumes. But with lower rates, slightly improved inventory, and spring around the corner, activity levels may have already bottomed out.
National Data
The MBS Highway National Housing Index recovered slightly, rising to 34 in December 2023, from 31 in November 2023. In December 2022, the index was at 14.
The overall improvement was driven by a 7-point rebound in the Buyer Activity sub-index, which rose from 20 in November 2023 to 27 in December 2023. Clearly, the one percentage point drop in average 30-year mortgage rates during the last six weeks brought some buyers back to the market, in spite of limited inventory and seasonal factors. A year ago, the Buyer Activity sub-index was at 15.
Competition levels have eased in recent months, but the low inventory of homes available for sale in most markets has limited the decline in the National Home Price Direction sub-index, which remained at 41 in December 2023. In December 2022, when home prices were falling month-over-month in most larger cities, the sub-index was at 12.
Regional Data
All but one of the regional indexes saw a month-over-month improvement in its Buyer Activity Index, with large jumps for the Northeast (30 → 50) and the West (21 → 36) regions. Respondents noted the recent drop in mortgage rates as the driver, with “well-priced” homes still selling very quickly.
Similar to the trends seen at the national level, the regional Price Direction indexes are holding up much better. In the Northeast (56), price increases still outnumber price decreases. And the West (47) and Mid-Atlantic (44) regions aren’t far from the 50 break-even. The weakest pricing trends remain in the Northwest (34) and Southwest (36).
“A year ago, our National Housing Index bottomed in January 2023, and then shot up as mortgage rates fell from above 7% to just below 6%, sparking a recovery in transaction volumes that was unfortunately short-lived. We expect to see a similar recovery in early 2024, but it should be more sustainable, with inflation continuing to ebb and the Fed closer to cutting rates than hiking them. After a tough 2023, there is reason to be optimistic,” said Barry Habib, MBS Highway Founder and CEO.
About MBS Highway’s Housing Index
MBS Highway’s monthly Housing Index provides an accurate and real-time read on buyer activity and home price direction both nationally and regionally in the U.S. housing market. This survey of 30,000 mortgage and real estate professionals fills a crucial industry need for insights that reflect buyers’ immediate experiences, helping mortgage loan originators to better serve homebuyers.
Any number over 50 indicates expansion while a number below 50 indicates contraction. The MBS Highway Housing Index can range between 0 and 100.
Dan Habib, MBS Highway’s Chief Revenue Officer, explained, “There are a few reliable housing reports available in the market, most of which are delayed by two months. Because MBS Highway has a large base of mortgage and real estate clients, we felt we were in a unique position to capture real-time housing data from our subscribers, who are on the front lines of the housing market.”
For more information on our methodology, visit highway.ai/mbs-highway-housing-index
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