3 Housing Market Predictions for June

If you've been trying to buy a home in 2023, you may be experiencing your share of challenges. The U.S. housing market still favors sellers, even though it's cooled considerably over the past year. If you're still in the process of hunting for a home -- or if you're thinking of selling yours -- here are some things you may want to gear up for in June.

1. Mortgage rates are unlikely to budge

Mortgage rates have been stuck in the 6% range since the start of 2023 for 30-year fixed loans. And as of mid-May, the average 30-year mortgage rate was 6.39%, according to Freddie Mac.

It's unlikely that mortgage loans will become much more affordable in June. Could we see rates dip down toward the lower 6% range? Sure. But we're not so likely to see 5% mortgages, as rates seem to be in a bit of a holding pattern.

2. Housing inventory might pick up, but only slightly

As of the end of April, there were 1.04 million unsold homes on the U.S. housing market, according to the National Association of Realtors (NAR). That's a 7.2% lift from the previous month, which is an encouraging bump.

However, that level of inventory puts available homes at a 2.9-month supply. And it generally takes a 4- to 6-month supply of available homes to meet buyer demand in full.

Because the U.S. housing market still lacks inventory, as a buyer, you might struggle to find a place that meets the right requirements and that's affordable to you. It also means you might face your share of competition from other buyers.

But if you're a seller, low housing inventory is the sort of thing it pays to capitalize on. A lack of competition gives you more of an upper hand. But do be aware that if you sell your home and need to finance another one, you could end up with a much higher interest rate on your mortgage than what you're paying now. So you'll need to weigh that con against the upside of potentially commanding a higher price for your home.

3. Home sales could decline

The NAR reported that as of April, home sales were down over 23% from a year prior. That trend could continue in June.

Buyers have been hesitant to enter the market due to higher mortgage rates. And also, if inventory remains low, it could lead to slower sales numbers.

Now to be clear, sellers don't have to panic over that 23.% decline. There's still plenty of demand out there. But it's a trend worth tracking nonetheless.

Should you buy or sell a home in June?

All told, buyers and sellers alike might face challenges when transacting in the real estate market in June. As a buyer, you might struggle with higher borrowing costs and limited options for homes. As a seller, you might have a hard time affording a new home, even if you manage to sell yours quickly at a decent price.

Ultimately, you'll need to consider your options carefully before making the decision to buy or sell. It's easy to make the case that June is a good time for either, but you could just as easily argue that it's better to wait.