New data from AccuTitle projects a 12 percent increase in initiated purchase transactions for the first quarter 2023, compared with the fourth quarter of 2022.
This comes on the heels of two challenging quarters where purchase transactions declined by 17 percent (Q3 2022) and 19 percent (Q4 2022).
In colder regions like the Northeast, purchase volume tends to increase throughout the first quarter of a given year and peak in May. This year, March looked strong, with a 5 percent increase over February, matching last year’s trend, according to AccuTitle.
However, data shows the Southeast is experiencing something different than typical years. While volume usually bounces back in January, AccuTitle is seeing a continued climb in March that it said could be due to improving market conditions.
Data also shows home prices are continuing to climb in 2023. Despite a decline in 2022 after a peak in April, home prices have remained historically high. The median sat at $342,000 as of March 23, essentially equal to highs seen a year ago.
AccuTitle has not observed a rebound in refinancing like it has with purchases.
“Interestingly, we saw a decline in refinance volume in the middle of 2021, long before major increases in interest rates,” AccuTitle stated in a release. “This might have been due to market saturation. Said another way, nearly everyone that should have refinanced already had done so. Of course, we saw this decline accelerate in 2022 as the Fed aggressively raised rates. However, with 2022 and 2023 loans creating ‘pent-up demand,’ we could see a refinance rush when rates drop again.”
The commercial refinance market has remained stronger than the residential side because many business loans are refinanced every 5-10 years regardless of interest rates. Volume is about 20 percent of what was seen at the peak of the market in early 2021, according to AccuTitle.