According to the National Association of Realtors, all-cash move-up buyers jumped to 27% of the market over the past year, up from 17% in the previous year. Because of the tremendous housing equity in the last few years this has allowed many buyers not to hold a mortgage. In 2022, our sales at 55+ Real Estate were 20% cash buyers with little or none in negotiation of price.
Cooling inflation boosts home affordability according to Lawrence Yun, chief economist of NAR. The inflation rate has been calming in recent months, contributing to falling mortgage rates through the holidays. Consumer prices are still falling well above the typical 2% inflation rate, but November’s level of 7.1% was the lowest in 2022. Decelerating inflation is the key reason for the forecast of a 5.5% mortgage rate by the second half of 2023. Should the deceleration speed up faster than expected, the possibility of mortgage rates in the 4% range exists – which would bring buyers back to the market that maybe first time buyers.