Real Estate Predictions for 2023: Is a Buyer’s Market Around the Corner?
The federal rate increased again, single-family home construction rates dropped, and housing prices reached two-year lows. Those are the headlines, anyways. But what’s driving the trends? And what should buyers, sellers, and real estate agents expect for next year?
While no one knows for sure, here’s what experts are saying about current market trends and the likely impact on the next year.
Rising Interest Rates, Rising Inflation
The average American’s buying power is decreasing, regardless of home prices. With inflation hovering at about 8% and mortgage rates at about 7%, a significant position of homebuyers is likely to wait.
And with the economy flirting with a significant recession, the Federal Reserve will likely raise rates again. So we may see mortgage rates rise to 9% next year.
Slow Building, Slow Moving
The next big question is how an exclusive housing market will affect available home inventory. Right now, the expectation is that there will still be higher demand than the supply of houses, but the gap is closing.
As the demand for housing slows due to home prices and interest rates, many builders are slowing down production. And new prices and interest rates affect current homeowners as well. Homeowners are unlikely to double or triple their interest rate if they can make their current home work for their needs.
All in all, new home production is slowing, and existing homeowners aren’t leaving. So even with the slowed demand, a slowed availability of homes will likely continue a higher demand than supply. At least for now.
Will 2023 be a Buyer’s Market?
The last two years have seen a staggering seller’s market, with demand and prices rising incredibly fast. So will 2023 change the real estate market in favor of home buyers?
Maybe. A lot rides on the balance of inflation, mortgage rates, and inventory availability. But some experts predict a buyer’s market as soon as the Summer of 2023.
What’s the Bottom Line?
All the signs point to an evolving, uncertain market. While we could predict low-interest rates and rising home prices in the last two years, for now, we can only see early signs of a shifting market. Only time will tell if the shift will be dramatic enough to convert to a buyer’s market.
It’s also important to understand that certain areas are more likely to remain in high housing demand. So while parts of the country may shift to a buyer’s market, larger cities and thriving local economies may not see such dramatic changes.
Need Help With Your Real Estate?
At AltaTerra Realty and Auction LLC, we serve Texans in expanding their business through quality land purchases. It’s critical to work with a team that understands your vision and values– and that’s what we’re here to bring to life.
Contact us today to begin your property search!
References:
https://www.bankrate.com/real-estate/housing-market-predictions-2023/#affordable