Housing prices have just reached a tipping point after almost a year, but will buyers miss it during the holidays?

While many homebuyers may be taking a break from their house hunting to indulge in some eggnog and holiday cheer, the brave few buyers still out there right now have a fantastic opportunity on their hands.
Want proof? Housing price growth fell to 9.5% in the week ended December 10, down from 10.3% in the week ended December 3. And this transition to single-digit growth is significant.
"This slowdown marks the first time in 49 weeks, almost a year, that median home prices have risen at a single-digit rate," explains Realtor.com Chief Economist Danielle Hale in her weekly analysis.
And not only housing price growth is decreasing with the end of 2022: mortgage interest rates have also decreased for the fifth week in a row.
So what might happen for the rest of the month, and once 2023 officially rolls in? Our weekly column "How is the housing market this week?" Breaks down the latest real estate statistics and what it all means for home buyers and sellers.

A breakthrough in housing prices

Tis the season for reflection, so why not take a look back at this year's housing price roller coaster?
In June, the median list price for properties hit a record high of $449,000. That price dropped to $416,000 in November.
Overall, house prices remained high. However, the recent decline in price growth to 9.5% "marks a significant slowdown from the peak growth earlier this year, when listing prices grew at a rate of nearly 18% year over year," says Hale.

The downward trend in mortgage interest rates

In late October, mortgage rates hit a 20-year high of 7.08% for a 30-year fixed-rate mortgage. This record rate meant that many buyers could no longer afford the same home they could get a year earlier, so many canceled their search.
However, in the past five weeks, rates have declined, falling to 6.31% for the week ended Dec. 15, according to Freddie Mac.
"Today's homebuyers have the benefit of mortgage rates that are three-quarters of a point lower than their peak in early November, thanks to recent positive inflation readings," says Hale.
However, despite these downward trends, it appears that many buyers are still avoiding market activity. So why aren't home buyers taking advantage of the one-two combination of slowing housing prices and lower mortgage rates?
"Whether holiday cheer or a still bleak view of current housing market conditions is the bigger driver of the pullback is an open question," says Hale.

Housing supply balloons as demand slows

One metric that didn't go down last week was the number of homes buyers had to choose from.
The number of active homes for sale in the week ending Dec. 10 was up 55% from a year ago, indicating that homebuyers are taking their time to make an offer — if they're making an offer at all.
What didn't rise was the number of new listings, which fell 16% in the week ended Dec. 10 compared to a year ago. This marks 23 weeks in a row that sellers have refused to add new listings to the housing supply. Many sellers do not want to give up their low mortgage rates by selling their homes and needing to get new loans to purchase their next properties.
"As new listings dwindle, the increase in inventory signals that the pullback in demand is even greater," Hale says.
Indeed, homes remained on the market 10 more days in the week ended December 10 compared to the same period last year. And smart sellers entering the market will want to pay attention to the rising number.
"Homeowners looking to sell in this market will need a dose of patience to go along with a smart pricing strategy that takes local market conditions into account," Hale adds.

Is it better to buy in 2022 or 2023?

As the housing market resets in response to inflation, buyers are finally back to having the final say. But for how long remains to be seen.
Over the past year, mortgage rates have responded to the Federal Reserve's efforts to bring inflation under control. When the Fed raised interest rates, mortgage rates followed the upward trend. And Chairman Jerome Powell noted at the Fed's last meeting that there is more work to be done to curb inflation, implying that "short-term interest rates will remain higher for a longer time than previously expected," Hale explains.
And what does this mean for home buyers in the new year?
"Our expectation for 2023 is that rates will climb higher before falling in the second half of the year," Hale adds.
Hale also predicts that the number of homes for sale in 2023 will be "relatively low".
So if you're interested in buying a property and holiday commitments aren't too heavy, the next two weeks before the clock strikes midnight in 2022 could be a great time to make an offer on a home.