For many prospective home buyers, the high interest rates in early 2022 made houses out of their reach. However, the home prices witnessed a slide in the latter half of the year. This meant more leverage for buyers with falling interest rates. Here is our forecast on 2023 trends.
Will the housing market get better in 2023?
Most experts predict a decline in home sales and a correction in prices. It remains unclear whether mortgage rates will increase in 2023. According to the National Association of Realtors, home sales are expected to decline by around 7%, while the national median home price will increase by 1%. The first quarter of 2023 could be similar to the fourth quarter of 2022. Interest rates are expected to decline in the second half of the year and thus could be more appealing to prostective buyers. There could also be a increase in the number of first-time buyers.
Will the home prices go down in 2023?
The 2008 crash is still fresh in our minds and the good news is, experts don’t expect that crash to repeat in 2023. Housing values are expected to increase but not at the pace witnessed in the past few years. Once interest rates start to stabilize in the spring market home prices are expected to remain steady and stay around these levels throughout the rest of the year.
How do mortgage rates look like in 2023?
Although most experts do not predict a big surge in the mortgage rates; the rates would depend on inflation and market conditions to name a few. According to many lenders, the rates have already peaked in early 2022 and would continue to decline, barring few minor increases.
Will housing inventory improve in 2023?
Lower interest rates, an increase in new construction, and a rising consumer confidence could spur higher housing inventory in 2023. New constructions that are expected to be completed in the coming months will help mitigate inventory shortage. The total housing inventory will depend upon new construction, first time buyers, and home owners’ preference for a second rental property, among other factors.
Advice for homebuyers in 2023
It is advisable not to put off buying a house at a rate prevalent post the 2008 crash. In next few years, interest rates are not expected to fall drastically. However, home prices are likely to come down, making a purchase more affordable. So, if buying a house is on your mind, you should start working on it now.