Understanding the Housing Market: 2023 Predictions
It's that time of year again! The season for making New Year's resolutions is upon us, and if one of your goals for 2023 is to buy a house finally, then you're in luck. It's no secret that the housing market is constantly changing. What may be true one year may not be the next. That's why it's crucial to stay up-to-date on the latest predictions for 2023.
This blog post will discuss some of the most likely changes in the housing market over the next year and what they could mean for you! Here are some predictions for the housing market trends that will take shape over the next few years.
2023 Housing Market Predictions
During 2022 we have seen constant home price growth paired with rising mortgage rates. Right now, it isn't exactly a buyer's market, with home prices seemingly unaffordable for most individuals and families. But what will things be like in the coming year? Will house prices continue overall real estate values continue to skyrocket due to real estate investors buying up everything? Read more to hear what we think is coming in our 2023 housing market forecast.
Home Mortgage Rates Will Remain Low
One trend that we predict will continue into 2023 is low mortgage interest rates. Historically, interest rates have been on a steady decline since the early 1980s, and there's no indication that this trend will change anytime soon. In fact, according to Freddie Mac's Primary Mortgage Market Survey, the average 30-year fixed mortgage rate in 2020 was just 3.13%. For comparison purposes, in 1981, the average rate was a whopping 16.63%!
So, what does this mean for potential homebuyers? Next year might be an excellent time to buy a house since you'll be able to get a low-interest rate on your mortgage. This will save you thousands of dollars over the life of your loan and make your monthly payments more affordable. Keep in mind, however, that although rates are predicted to stay low, they could start to rise slowly as the economy continues to recover from the pandemic. So if you're thinking about buying a house in 2023, it might be best to do it in the first half of 2023.
The Pandemic Will Impact Where People Want to Live
The pandemic has changed the way we live in many ways, one of which is our willingness to live in dense urban areas. According to a recent survey from the National Association of REALTORS®, 63% of respondents said they would prefer to live in a suburban area or small town after the pandemic ends. This is up from just 56% pre-pandemic. Additionally, 22% said they would prefer to live in a rural area, while only 15% said they would still like to live in an urban area.
The housing market will likely demand more suburban and rural properties in 2023 and beyond. If you're looking to buy a house in one of these areas, you might find yourself competing against other buyers who are also looking for more space and fewer people. So if you have your heart set on a particular property, don't hesitate to make an offer as soon as possible.
There Will Be More New Construction Homes Available
The pandemic also caused many people to reassess their living situations and decide they need more space than they currently have. According to the NAR survey mentioned above, 31% of respondents said they plan on moving to a larger home once the pandemic ends. This has led many developers and builders to focus on constructing new homes larger than what's currently available on the market.
If you're hoping to buy a new construction home in 2023, you may have more options than you think. However, remember that new construction homes can be more expensive than existing ones since they come with all of the bells and whistles (think granite countertops and stainless steel appliances). So if you're working with limited funds, consider an existing home instead.
TRN: Your Housing Market Experts
There you have it! These are just some of the housing market trends we predict will take shape over the next few years. Of course, only time will tell what 2023 has in store for us, but these predictions should give you a good starting point as you begin your search for a new home.