Are You Curious About What the Future of the Housing Market Holds for 2023?
It’s safe to say that the past year has been an absolute whirlwind for buyers and sellers. The 2022 housing market was evidently a Seller’s Market, and buyers faced adversaries like a low housing inventory, competitive bidding wars and increasing mortgage rates. On the other spectrum, sellers were experiencing quick sales and an influx of over-asking sold prices in the beginning of the year, only for existing home sales to decrease drastically by the end. As we approach the new year, the days of a Seller’s Market are far behind us as we advance toward a more balanced market, or essentially a stalemate. Read on for our take on the housing forecast for 2023.
The biggest concern of 2023, and the reason why it won’t be solely a Buyer’s Market yet, is affordability. Inflation, rising mortgage rates, high demand for houses and low housing inventory are all contributing factors that will drive up home prices. The rising costs of rent, the disruption of global supply chains, and increasing prices are all preventing potential homebuyers from having the surplus to save for a down payment. In addition to that, the rising mortgage rates make credit more unaffordable, and it’s expected that mortgage lenders will approve fewer applicants, according to Norada Real Estate Investments. Furthermore, the housing inventory still hasn’t caught up to buyer demand. With the houses being scarce, it allows for the home prices to increase, which results in pricing out the majority of potential buyers.
To recap, affordability seems out of reach for a lot of potential homebuyers, and it’s causing the demand to decrease slightly.
With a cooling housing market, comes a slowing price growth. In 2022, we have seen the housing prices skyrocket due to the low supply of houses available to meet demand. Evidently, we witnessed the median national listing price reach a peak growth rate of 18.2% in June of this year. With limited active listings, homebuyers were willing.
