June Market Report

The Big Story

No Default!

Quick Take:

Home sales fell 3.4% month over month as homebuyers faced volatile mortgage rates and sustained low inventory. Far fewer new listings have come to market this year and, in May, new listings were 24% below the long-term average.
The United States narrowly avoided a catastrophic and self-inflicted credit default, allowing the Fed to focus on the robust labor market and generally strong economy in an effort to decide whether to continue hiking rates.
Broadly, home prices have contracted slightly from the peak they reached in June 2022, but the steady rate increases have slowed down the housing market significantly, even compared to the years before the white-hot market of 2020-2022.

Note: You can find the charts & graphs for the Big Story at the end of the following section.

The labor market is too strong for a recession, so what’s the Fed to do?

We did it, gang! We made it through another debt ceiling crisis! The United States paid its bills in full and on time, avoiding default and a global economic catastrophe with two days to spare. This self-inflicted wound would have had far-reaching negative economic consequences in the near and long term, including far higher mortgage rates. Financial markets were mostly unbothered despite the fact that this Congress seems to be the most amenable to default. The 10-year Treasury yield rose a modest 0.4% in May, which translated to a 0.4% increase in the average 30-year mortgage rate. The S&P 500, which tracks the stock of the 500 largest publicly traded U.S. companies, reached a high for the year at the beginning of June, up 12% year to date. To be fair, a debt ceiling resolution that didn’t totally destroy the U.S.’s global standing was the most probable scenario. Now that the debt ceiling has been lifted until 2025, we turn our sights back to the Fed and interest rates.

During their last meeting, the Fed forecasted a potential pause in rate hikes after three sizable regional bank failures this year, but recent jobs data may swing them back toward a 0.25% increase. Increasing mortgage rates have primarily driven the housing market slowdown we’ve experienced over the past 12 months. Higher rates affect the housing market so strongly because housing is typically financed. Potential buyers have struggled with mortgage rate volatility over the past 18 months, as the average 30-year mortgage rate went from historic lows in 2021 (~3%) to a 20-year high (~7%) in November 2022. Luckily, rates contracted but have remained around 6.5%. Because home prices nationally haven’t contracted substantially from their all-time highs, small rate changes can make a huge difference in the cost of financing. The average 30-year rate hit a 2023 high at the start of June. However, we still expect rates to stay within the 6-7% band this year. At this point, continued rate hikes tell us more about the length of time rates will stay high, since the Fed tends to move in smaller steps over time. This means that, for every step up, there will need to be a step down, which will prolong the process of returning to lower mortgage rates.

The Fed has a tricky decision regarding future rate hikes. The broad labor market has shown its strength and seeming immunity to rate hikes. The monthly increase in employment from the U.S. Bureau and Labor Statistics has beat Wall Street estimates for the 14th month in a row. In May alone, 339,000 jobs were created, crushing the expected 195,000 jobs. At the same time, however, unemployment rose from 3.4% to 3.7% from April to May. Additionally, the first-quarter 2023 GDP data was revised up from 1.1% to 1.3% quarter over quarter. With this mix of data, we’re expecting a rate hike pause at the June meeting, but a hike again in July.

The housing market is in an interesting spot, where the economy is too good to lower rates but homes have become too expensive for potential buyers. Fewer sellers and buyers are in the market, so sales are unlikely to grow meaningfully this year.

Different regions and individual houses vary from the broad national trends, so we’ve included a Local Lowdown below to provide you with in-depth coverage for your area. In general, higher-priced regions (the West and Northeast) have been hit harder by mortgage rate hikes than less expensive markets (the South and Midwest) because of the absolute dollar cost of the rate hikes and the limited ability to build new homes. As always, we will continue to monitor the housing and economic markets to best guide you in buying or selling your home.

Big Story Data

Case-Shiller 20-City Home Price Composite chart showing prices peaking in 2022 and easing through March 2023.

Chart of weekly 15- and 30-year fixed mortgage rates from December 2021 to June 2023.

Line chart of existing home sales and housing inventory from May 2021 to April 2023.

Line chart of U.S. monthly new listings, showing 407K in May 2023, 24% below average.

S&P 500 daily year-to-date chart, rising from about 3.8K in January to 4.3K in June 2023.

The Local Lowdown — Miami-Dade, Broward, and Orange Counties

Quick Take:

Year to date, median single-family home and condo prices are up across markets, indicating that the lack of new listings is driving pricing despite higher mortgage rates. Notably, Miami-Dade single-family home prices and Broward single-family home and condo prices all reached record highs in May.
Active listings in the selected Florida markets have struggled to grow this year, increasing competition and accelerating price growth.
Months of Supply Inventory has declined significantly in 2023, homes are selling more quickly, and sellers are receiving a greater percentage of asking price, all of which highlight an increasingly competitive environment for buyers.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Home prices are rising rapidly, hitting new highs

The selected Florida markets are unlike most of the rest of the country in how quickly home prices appreciated this year. Median prices hit new record highs for Miami-Dade single-family homes and Broward condos, and the other markets will likely hit new records in the summer months.

Last year, single-family home prices peaked in May and June as buyers rushed to lock in a lower mortgage rate. The Fed announced rate hikes at the end of 2021 that would swiftly affect rates in 2022. The average 30-year mortgage rate rose 2% in the first four months of 2022, crossing 5% for the first time since 2011. That 2% jump caused the monthly cost of financing to increase 27%, so buyers rightly rushed to the market. As rates rose higher, the market cooled and home prices fell in large part to accommodate the higher cost of a mortgage. However, in 2023, demand started to rise again despite elevated mortgage rates, but it wasn’t met with the typical number of new listings.

This year, the number of new listings has been significantly lower than usual. Although Florida inventory hasn’t trended “typically” since 2019, typically, inventory grows in the first half of the year as new listings greatly outpace sales. At this point, inventory growth in the first half of the year can’t make up for the sustained inventory stagnation over the past two years, keeping supply of homes and, in turn, sales historically low for the rest of the year. As demand increases through the summer months, competition among buyers will climb with it, raising home prices. Single-family home and condo prices are at or near their record highs, and we could easily see home prices reach new record highs over the summer.

Inventory fell across markets as fewer new listings came to the market, boosting competition

Single-family home and condo inventory has struggled to grow, even showing an outright decline over the past two years — and 2023 hasn’t changed that trend. The number of home sales is, in part, a function of the number of active listings. Without more new listings and higher inventory, sales typically struggle to grow as well. Even with higher interest rates, which only reduces the number of potential homebuyers, seasonal demand far outpaced available inventory, so far more sellers could come to market. Potential sellers who have fully paid off their property are in a particularly good position if they don’t have to finance their next property after the sale of their home.

Buyer competition is ramping up with fewer listings coming to the market, and sellers are gaining negotiating power. In May 2023, the average seller received 1-3% more of their listed price as compared to January. Inventory will almost certainly remain historically low for the year and will likely only get more competitive in the summer months.

Months of Supply Inventory for single-family homes and condos indicates a sellers’ market

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around four to five months in Florida, which indicates a balanced market. An MSI lower than four indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while an MSI higher than five indicates there are more sellers than buyers (meaning it’s a buyers’ market). MSI dropped significantly this year, indicating a market shift in favor of sellers. MSI for single-family homes and condos suggests a sellers’ market in all the selected markets with the exception of Miami-Dade condos, which is in a buyers’ market.

Local Lowdown Data

Line chart compares monthly median home prices in Miami-Dade, Broward, and Orange counties from May 2021 to May 2023.

Bar chart comparing year-over-year single-family home median price changes in three Florida counties, June 2022–May 2023.

Line chart compares monthly median condo prices in Miami-Dade, Broward, and Orange counties, May 2021–May 2023.

Bar chart of year-over-year condo price changes in Miami-Dade, Broward, and Orange counties, June 2022–May 2023.

Chart comparing Miami-Dade single-family homes for sale, new listings, and sold from May 2021 to May 2023.

Broward single-family home market chart showing monthly inventory, new listings, and sales from May 2021 to May 2023.

Chart of Orange single-family home inventory, new listings, and sales from May 2021 to May 2023.

Miami-Dade condo inventory chart, May 2021–May 2023, showing homes for sale, new listings, and homes sold.

Broward condo market chart comparing homes for sale, new listings, and sold from May 2021 to May 2023.

Orange condo market chart comparing homes for sale, new listings, and sold homes from May 2021 to May 2023.

Line chart comparing single-family home days on market in Miami-Dade, Broward, and Orange from May 2022 to May 2023.

Line chart comparing monthly condo days on market in Miami-Dade, Broward, and Orange counties, May 2022–May 2023.

Line chart comparing months of single-family home supply in Miami-Dade, Broward, and Orange counties, May 2022–May 2023.

Condo months of supply chart for Miami-Dade, Broward, and Orange counties, May 2022 to May 2023.

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June Market Report

Recent Blog Posts

Why Developers Are Betting Millions on Smaller Luxury Buildings in Coconut Grove

Who Is Buying Miami’s $10 Million Homes?

The Return of the Cash Buyer: Why Miami’s Wealthy Have an Advantage in 2026

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