Top News

Bad News Greets Residential Home Investors and Real Estate Agencies in the First Weeks of 2023


S&P 500




Dow 30








Russell 2000




Crude Oil
















10-Yr Bond
















CMC Crypto 200




FTSE 100




Nikkei 225




The end of 2022 was not kind to residential real estate investors or those whose agencies sell and finance homes. Not only did mortgage interest rates climb again at the end of December, but applications were down by double digits, according to the Mortgage Bankers Association (MBA).

The average interest rate for 30-year fixed mortgages for loans with a 20% down payment increased to 6.58% from 6.34% two weeks before. For reference, the rate was 3.33% at the end of 2021. Meanwhile, mortgage applications were down 13.2% at the end of 2022 compared to two weeks earlier. To add to the negative news, the demand for refinancing dropped 16.3% from two weeks earlier and 87% from the same period in 2021.

“Mortgage rates are lower than October 2022 highs but would have to decline substantially to generate additional refinance activity,” MBA economist Joel Kan said. “Purchase applications have been impacted by slowing home sales in both the new and existing segments of the market. Even as home-price growth slows in many parts of the country, elevated mortgage rates continue to put a strain on affordability and are keeping prospective homebuyers out of the market.”

Latest Offerings on Benzinga’s Real Estate Investment Screener

10 Federal Self-Storage 4 – Self-Storage Real Estate Fund With 14%-16% Target IRR

Mercantile Industrial Park – Fully-Leased Light Industrial Portfolio With 17% Target IRR

The Chloe Residences – Multifamily Property In Austin, TX, With 17.4%-19.4% Target IRR predicts mortgage rate increases will continue into 2023 and will hover around 7.1% by the end of the year. Straining to find any good news at all, added, “Remember, that’s lower than the 7.76% average rate seen in 30-year mortgages since 1971.”

Erika Giovanetti, a U.S. News & World Report reporter, said that based on lessons learned in the late 1970s, home prices home prices may retain their values longer than some predicted earlier in the year.

“When mortgage rates rose rapidly during the late ’70s and early ’80s, home price appreciation decelerated, but growth remained positive. Home prices did not fall until shortly after when a recession was underway,” she wrote. “So if the Federal Reserve can manage to stick a soft landing — that is, by tempering inflation without driving the U.S. economy into a recession — then higher home prices may be here to stay.”

Check Out More on Real Estate from Benzinga

Bezos-Backed Startup Lets You Become A Landlord With $100

This Fund Is Looking To Produce Moderate Returns If The Real Estate Market Doesn’t Collapse – And Spectacular Returns If It Does

This Little-Known REIT Is Producing Double-Digit Returns In A Bear Market: How?

Don’t miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better.

© 2023 Benzinga does not provide investment advice. All rights reserved.


Cathie Wood Sells 99% of Silvergate Stake as Customers Flee

Previous article

Sam Bankman-Fried’s lawyers just filed a claim to keep his $450 million in Robinhood shares, arguing he needs them for legal fees

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Top News