Chuncey Foreman Denver Colorado Realtor & Real Estate

  • Facebook
  • Google+
  • Instagram
  • LinkedIn
  • Twitter
  • Home
  • Free Resources
    • Free Home Evaluation
    • Free Property Alerts
  • Search
    • Advanced Search
    • Map Search
  • Blog & Updates
  • About
    • About Chuncey
    • Testimonials
  • FAQs
  • Contact

Housing Market Expectations in 2023🏡

December 21, 2022 By Chuncey Foreman

What To Expect from the Housing Market in 2023 | Simplifying The Market

The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it’s put the market into a reset position.

As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This cascaded impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt more predictable.

But what does that mean for next year? What everyone wants is more stability in the market in 2023. We’ll need to see the Fed bring inflation down even more and keep it there for that to happen. Here’s what housing market experts say we can expect next year.

What’s Ahead for Mortgage Rates in 2023?

Moving forward, experts agree it will still be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. So while there may be early signs that inflation is easing as we round out this year, we’re not out of the woods yet. Inflation is still something to watch in 2023.

Experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize more in 2023. Whether that’s between 5.5% and 6.5%, it’s hard for experts to say precisely where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):

What To Expect from the Housing Market in 2023 | Simplifying The Market

That means we’ll start the year where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrate, explains:

“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.”

In the meantime, expect some volatility, as rates will likely fluctuate in the weeks ahead. If inflation comes back under control, that would be good news for the housing market.

What Will Happen to Home Prices Next Year?

Homes prices will always be defined by supply and demand. So the more buyers and fewer homes there are on the market, the more home prices rise. And that’s precisely what we saw during the pandemic.

But this year, things changed. Home prices moderate, and housing supply grows as buyer demand pulls back due to higher mortgage rates. The level of moderation has varied by local area – with the most significant changes happening in overheated markets. But do experts think that will continue?

The graph below shows the latest home price forecasts for 2023. As the different colored bars indicate, some experts say home prices will appreciate next year, and others say home prices will come down. But again, if we take the average of all the forecasts (shown in green), we can get a feel for what 2023 may hold.

What To Expect from the Housing Market in 2023 | Simplifying The Market

The truth is probably somewhere in the middle. That means nationally; we’ll likely see relatively flat or neutral appreciation in 2023. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Bottom Line

Mortgage rates will define the 2023 housing market, and rates will be determined by what happens with inflation. The best way to keep a pulse on what experts are projecting for next year is to lean on a trusted real estate advisor. Let’s connect.

Filed Under: Buyers, Housing Market Updates, Interest Rates, Pricing, Sellers

Recent Posts

  • 2023 Housing Market Turnaround
  • Should You Rent Your House or Sell It?
  • Where Will You Go If You Sell?🤔
  • Don’t Fear Foreclosure Headlines
  • 3 Factors That Affect Home Affordability
  • JAN 2023/FEB 2023 NEWSLETTER 🎙️
  • Want To Sell Your House? Price It Right.
  • 2023 Pre-Approval: What to Know
  • Have Home Values Hit Bottom?
  • Housing Market during Past Recessions
* * , *
Equal Housing
Blue Fire Group    Real Estate Websites
© 2023 Copyright
LAC
Buying Buddy    Powered By Buying Buddy ®