Is the Housing Market Correcting?

If you’re following the news, all of the headlines about conditions in the current [housing market](https://www.simplifyingthemarket.com/2022/05/31/what-does-the-rest-of-the-year-hold-for-the-housing-market/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) may leave you with more questions than answers. _Is the boom over? Is the market crashing or correcting?_ Here’s what you need to know. The housing market is moderating compared to the last two years, but what everyone needs to remember is that the past two years were record-breaking in nearly every way. Record-low [mortgage rates](https://www.simplifyingthemarket.com/2022/05/17/why-rising-mortgage-rates-push-buyers-off-the-fence/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) and [millennials](https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/) reaching peak homebuying years led to an influx of buyer demand. At the same time, there weren’t enough homes available to purchase thanks to many years of underbuilding and sellers who held off on listing their homes due to the health crisis. This combination led to record-high demand and record-low supply, and that wasn’t going to be sustainable for the long term. The latest data shows early signs of a shift back to the market pace seen in the years leading up to the pandemic – **not a crash nor a correction**. As _realtor.com_ [says](https://www.realtor.com/news/trends/housing-market-showing-signs-of-correction-what-buyers-sellers-need-to-know/): > **_“_****_The housing market is at a turning point_**_. . . . We’re starting to see signs of a new direction,_ _. . .”_ #### **Home Showings Then and Now** The [_ShowingTime Showing Index_](https://showingindex.stats.showingtime.com/docs/lmu/x/UnitedStates?src=page) tracks the traffic of home showings according to agents and brokers. It’s a good indication of buyer demand. Here’s a look at that data going back to 2019 (_see graph below_): [](https://i0.wp.com/cherylbowerrealestate.com/wp-content/uploads/2022/06/20220614-MEM-Eng-1.png?ssl=1) The 2019 numbers give a good baseline of pre-pandemic demand (_shown in gray_). As the graph indicates, home showings skyrocketed during the pandemic (_shown in blue_). And while current buyer demand has begun to moderate slightly based on the latest data (_shown in green_), showings are still above 2019 levels. **And since 2019 was such a strong year for the housing market, this helps show that the market** [**isn’t crashing**](https://www.simplifyingthemarket.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/?a=550432-7d0dd2250a392515b4ab3273bfa644ce) **– it’s just at a turning point that’s moving back toward more pre-pandemic levels.** #### **Existing Home Sales Then and Now** Headlines are also talking about how existing home sales are declining, but perspective matters. Here’s a look at [existing home sales](https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales) going all the way back to 2019 using data from the _National Association of Realtors_ (NAR) (_see graph below_): [](https://i0.wp.com/cherylbowerrealestate.com/wp-content/uploads/2022/06/20220614-MEM-Eng-2.png?ssl=1) Again, a similar story emerges. The pandemic numbers (_shown in blue_) beat the more typical year of 2019 home sales (_shown in gray_). And according to the latest projections for 2022 (_shown in green_), the market is on pace to close this year with more home sales than 2019 as well. It’s important to compare today not to the abnormal pandemic years, but to the most recent normal year to show the current housing market is still strong. _First American_ [sums it up](https://blog.firstam.com/economics/the-reconomy-podcast-breaking-down-the-recency-bias-in-housing-market-data) like this: > _“. . . today’s housing market looks a lot like the 2019 housing market, **which was the strongest housing market in a decade at the time**.”_ ### **Bottom Line** If recent headlines are generating any concerns, look at a more typical year for perspective. The current market is not a crash or correction. It’s just a turning point toward more typical, pre-pandemic levels. Let’s connect if you have any questions about our local market and what it means for you when you buy or sell this year. Posted in [For Buyers](https://cherylbowerrealestate.com/category/for-buyers/), [For Sellers](https://cherylbowerrealestate.com/category/for-sellers/), [Housing Market Updates](https://cherylbowerrealestate.com/category/housing-market-updates/)