POST TAGSMortgage News
Blog posted On December 30, 2022
2022 wasn’t necessarily smooth sailing for home buyers. As the year comes to a close, we’re starting to see some light at the end of the tunnel. What will this bring for the housing market next year? Here are four predictions for 2023 according to housing market experts.
Predictions for the future years tend to be all over the place. But when it comes to home inventory in 2023, most experts agree that the number of homes for sale should increase. “We will have more inventory than in the last two years,” said George Ratiu, manager of economic research at Realtor.com. For buyers, this is great news. After two nears of limited options, high competition, and offers over asking prices, buyers finally see starting to see things turn in their favor.
Due to decreased affordability over the past year, fewer buyers are looking for homes. With less competition, buyers can likely get a home with more of their desired features and maybe even with some seller concessions as well. Home sales have been declining in recent months, and sellers are having a harder time selling their home quickly, which oftentimes means they will reduce their sales price, offer to pay for closing costs, or even pay for a mortgage payment buydown. “The buying conditions … will be unambiguously better for buyers in 2023, especially in the first half of the year, compared to the first half of 2022,” says Jeff Tucker, senior economist at Zillow.
Home price appreciation has seen consecutive months of declines this fall and winter. It’s likely these declines will continue at least into the beginning of 2023, with annual price gains much lower than they were at the same time in 2022. “I see many hopeful signs for early next year,” said Lawrence Yun, National Association of REALTORSÒ (NAR) chief economist. “After a big boom over the past two years, there will essentially be no change nationally” in home prices in 2023, Yun said. “Half of the country may experience small price gains, while the other half may see slight price declines. The NAR forecast for price growth in 2023 is 0%, compared to 16.9% in 2021 and the estimated 9.6% in 2022.
Inflation and jobs reports are the two key factors that have the eyes of the Federal Reserve. Should inflation and job growth continue to cool, the Fed, the bond market, and mortgage rates should be happier. Over the past month alone, rates have seen a sharp downward trend, thanks to lower-than-expected inflation reports and a lower rate increase from the Fed. While they were trending above 7% at one point this year, certain predictions have them falling below 6% by the end of next year.
Things are looking up for buyers. Get ready for the new year with a quick and easy preapproval by clicking “Get Started” above!