What to Expect from the 2023 Housing Market

Over 2020 and 2021, we saw a red-hot housing market. This was due to an average 3% mortgage rate and low inventory, which created a fast-paced market filled with bidding wars. In 2022, the market underwent a significant shift. Higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices. We are now in a new year, and the question is, will this year bring changes to the market?

An article recently from HousingWire states that:

“But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”

If inflation continues to ease, we will see mortgage rates stabilize. National Association of Realtors (NAR) states:

“2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs. . .”

This new normal could provide welcome relief for buyers who were feeling the strain of an intense market. Buyers who have been putting their plans on hold to become first-time homebuyers or upgrade to their dream homes should take advantage of this unique window of opportunity soon. Lawrence Yun, Chief Economist, states that:

“this may be the one and only window for the next few years to get into a buyers’ market. And remember … as the Federal Reserve data shows, home prices only go up and always recover from recessions no matter how mild or severe.” 

How to Prepare

How do you start preparing for the home-buying process? Here are a few steps:

• Get Pre-Approved: Getting pre-approved will give you a clearer picture of your purchasing power and the type of home to target. Pre-approval shows that you are a serious buyer and can help a seller feel more confident in your offer. 
• Be Financially Ready: Make sure you are ready to make a down payment and have enough funds for closing costs. Also, research and talk to a lender about what types of home loans you qualify for and consider applying for an FHA or USDA loan if you need more assistance. 
• Research Neighborhoods: Take the time to research the neighborhoods that interest you and ensure they align with your lifestyle needs. Also, examine the market values of homes in those neighborhoods so that you are prepared to make an informed offer.

But, the most important thing is to consult and work with a real estate professional. I would be delighted to work with you and help you along your home-buying journey. I will help provide valuable insight and guidance and answer any questions about the market forecast. Reach out to me today! Let’s get started!