While we may not have a crystal ball, we have been in this industry a long time. We’ve seen it all. That’s why we’re confident that with our experience and the insight of some additional experts, we can predict what’s coming this year.
If you’re thinking about buying or selling but don’t know what to expect, read on for our 2023 housing market predictions.
Home Prices Will Remain Steady
The Chief Economist for the National Association of Realtors (NAR) predicts the national median home price in the United States will increase 1 percent in 2023. This isn’t the news some people wanted to hear, as some expected the high interest rates to drive prices down. It looks like 2023 will be a year real estate prices don’t move much. Looking on the bright side, at least property prices won’t increase by a double-digit rate, which we’ve seen during the past three years.
Buyer Competition Will Cool
With prices staying the same and interest rates remaining higher than they’ve been in a decade, some buyers will jump out of the market. They either won’t be able to afford a home, or they’ll decide to wait until the market is more inviting.
The economy is the wild card in just how many buyers will put their plans on hold. If inflation continues rising and layoffs are prevalent, buyers that weren’t deterred by the high interest rates may get spooked and decide to postpone their homebuying plans. On the other hand, if inflation calms down and the unemployment rate remains low, these buyers may stay in the market in 2023.
Inventory Will Remain Low
Homeowners wanting to sell their properties may hold off on doing so in 2023. The high interest rates, coupled with the high real estate prices may convince them to stay where they are for the time being. This scenario takes some of the properties out of a market where there was already a housing shortage. So, for the homebuyers who stay in the market, competition for attractive homes in prime locations may still be fierce.
Want to Buy a House in 2023? Here’s What To Do
Our predictions of high home prices and low inventory weren’t meant to scare you off. They’re just what we believe will occur in 2023 based on several factors going on now. However, it’s never a bad time to purchase a home if you’re ready to make the leap. If you plan to buy in 2023, start doing these things now:
- Sock away money. A bigger amount down can offset the increase in monthly mortgage payments caused by higher interest rates.
- Improve your credit score. Pay every bill on time to create positive credit history, pay down your credit cards, and avoid charging anything else until you get into your new place.
- Reconfigure your budget. You might need to re-think how much house you can afford. This may mean looking in a less-desirable neighborhood or buying one that needs more work than you’d originally planned.
- Talk to a professional loan officer. Trust your lender to look at your personal financial picture, lay out your options, and help you decide the best move to make.