Even though there isn’t the same level of frenzy in the housing market right now that there was in the previous two years, this does not mean that the market is stagnant. Actually, buyer traffic is still very active right now.
A gauge of the number of home tours by buyers is the ShowingTime Showing Index. In order to put today’s situation into proper perspective, the graph below uses that index to show historical trends in buyer activity.
It demonstrates the seasonality of the housing market. The buyer activity peaked in the first half of each year (during the peak homebuying season in the spring) and slowed as each year came to a close, according to a consistent pattern in the market’s most recent normal years (shown in gray).
As a result of the market’s reaction to the ensuing uncertainty when the pandemic struck in March 2020, that trend was broken (indicated in blue in the middle). From there, we went into the pink-hued “unicorn” years of housing. At this time, buyer demand was extremely high and mortgage rates were at an all-time low. Although at much higher levels, similar seasonal trends were still present at that time.
Let’s now consider 2023. The volume of traffic is lower than it was last month and below the peaks we experienced during the “unicorn” years. But instead of a sudden decline in demand, there is a gradual return to more typical seasonality. The ShowingTime report details:
“Showing traffic declined about 10% in May . . . This follows a typical seasonal pattern – disrupted by the pandemic but now beginning to return . . .”
Let’s zoom in to show that this is not a sharp decline. Here is a graph for the previous five years using only May data. It demonstrates how robust the current buyer demand still is.
How Does That Affect You?
Still touring homes are prospective buyers. They are more active now than they were in May 2022, when sticker shock over rising mortgage rates began to set in, and unquestionably more so than they were in the previous normal years. So keep in mind that there are still lots of buyers. And if it weren’t constrained by the lack of available homes for sale, it might actually be even stronger. According to U.S. News:
“Housing markets have cooled slightly, but demand hasn’t disappeared, and in many places remains strong largely due to the shortage of homes on the market.”
