3 Housing Market Predictions for March

Here's a taste of what could be in store for the real estate market.

If you've been struggling to buy a home so far this year, well, there's probably a reason for it. We started off 2023 with higher mortgage rates and elevated home prices.

Now, it's true that housing market conditions can change from one month to the next. But at this point, we're unlikely to see major shifts during the month of March. Here's what to expect.

1. Mortgage rates will remain high

Mortgage rates dipped a bit in early 2023 compared to where they sat in the fall of 2022. It's hard to say what direction mortgage rates will trend in during March. We might see them rise a bit compared to where they're at today, or they could dip -- perhaps even just below the 6% mark.

But all told, we should still expect mortgage rates to be elevated, historically speaking. And while there are steps you can take to eke out savings on a mortgage, like boosting your credit score and shopping around with different lenders, you might end up paying more to borrow for a home than you'd like to.

2. Housing inventory won't really pick up

The National Association of Realtors (NAR) reports that housing inventory was up about 15% in January compared to a year prior. In spite of that, there were only 980,000 units for sale in January, which represents a mere 2.9-month supply of homes. It usually takes a four- to six-month supply to adequately meet buyer demand.

Since winter isn't a particularly popular time to put a home up for sale, and the weather can be pretty harsh in March in much of the country, we may not see much of an uptick in property listings. That means buyers might struggle to find suitable homes.

If you're a seller, however, low inventory is a good thing. It means you may not have a lot of competition, and that could make it much easier to sell your home quickly, and for a price you're happy with.

3. Homes will remain expensive

Any time there's not enough supply of a given commodity to meet buyer demand, its price tends to rise. And that's why housing prices are likely to remain elevated in March.

In January, the median existing home sale price was $359,000, as per the NAR. Now, that's only a 1.3% increase from a year prior. But let's also remember that home prices were already up quite a bit in early 2022. So all told, buyers shouldn't really expect any bargains in March.

Sellers, however, are in a good position to capitalize on low inventory. And if you've been thinking of listing your home, you may want to do so before a potential spring rush.

Unfortunately, March could end up being a challenging month for prospective home buyers. Sellers, on the other hand, are still in a great position to capitalize on current real estate market conditions. We don't know how long those will last, though, so anyone serious about selling a home may want to get moving sooner rather than later.