The 2023 U.S. New-Home Market Predictions Paint a Positive Outlook

Alex Veiga on Florida Realtors published an article on the subject. Veiga stated that “Wall Street Expects a Robust 2023 New-Home Market.”

Here are the highlights of the article:

• Homebuilder stocks are rising; investors anticipate a boost in builders’ prospects in the spring homebuying season.
• KB Home, PulteGroup, and Tri Pointe Homes are among the U.S. homebuilders whose stock prices increased by more than 20% this year.
• The SPDR S&P Homebuilders ETF is up nearly 10%, S&P 500 index is up about 7%.
• Analysts predict: “Homebuilding stocks may cross the valley from recession to potential recovery in the second half of 2023.”
  
• Mortgage rates soared to a two-decade high in 2022, leading to a deep slump in the housing market and sales of new U.S. homes falling by 17% from the previous year.
• Homebuilders reduced prices and offered incentives to buyers, such as: covering closing costs to counteract the negative impact of high mortgage rates on demand.
• A modest easing in mortgage rates this year has helped to entice buyers, leading to a rise in new home sales every month in December, January, and February.
• Sales of new and existing homes are expected to remain low this year, but some builders are raising prices and dialing back incentives in anticipation of demand.
• The number of existing homes for sale remains near historic lows, allowing homebuilders to take market share.
• From 2000 until the pandemic, new homes represent about 11% of all homes for sale. This year, that figure has risen to 27%.