Most likely, if you’re looking to buy or sell a house soon, you want to know what the real estate housing market will look like in 2023 to make an informed decision.
Everyone seems to have a different opinion about what the housing market will look like in 2023. Nevertheless, after doing all the research myself, I compiled a list of important subjects to consider. To make a better decision, you must consider all of these factors since every situation is different, and some may not apply to you.
If you’re a seller, read: Should I sell my house now or wait until 2023?
Table of Contents
- Factors That Affect the Real Estate Housing Market 2023.
- Will the Housing Market Crash in 2023?
- Will House Prices go Down in 2023?
- Will House Prices Increase in 2023?
- Will 2023 be a Better Year to Buy a Home?
- Will Interest Rates Drop in 2023
- Real Estate Housing Market 2023 Conclusion.
Factors That Affect the Real Estate Housing Market 2023.
In 2021 and 2022, we experienced a crazy market, but prices are starting to fall again, and the price spikes are ending. We are already amid the cooldown. But there are many factors to consider, which have contributed and will continue to contribute to this. To avoid confusing anyone or going on a rant, I’ll leave it at that. I have compiled a list of the four most important factors to consider.
You must play around with these four factors since your situation is likely to be a bit different than another person.
Inventory has been on the rise and is predicted to keep doing so. This is largely due to increasing mortgage rates, declining demand, etc.
Mortgage Rates –
Banks and lenders have been increasing their mortgage rates and will continue to do so through 2023. This was done as a measure to combat the inflated market.
Demand has been going down. This is because mortgage rates are way higher now than earlier this year. Bringing the whole cost of buying a property a lot higher and forcing some buyers out of the market. However, if you are not taking a mortgage to buy the property and can pay in full cash, then you’re in luck!
Property Prices –
We are starting to see houses on the market for longer, sellers dropping their realtors and going FSBO while lowering their prices. With increasing mortgages, lower demand, and higher inventory. People who are truly looking to sell their house are being forced to drop their prices, unlike some opportunists who are just trying to jump on the high-market boat even though it is too late.
Let’s jump to the most common questions and answers about the real estate housing market in 2023. Please remember to save this link and come back every week to check for updates. Many things can happen, and I want to ensure I keep you updated with the most reliable information.
Will the Housing Market Crash in 2023?
According to Wells Fargo, the market will more likely than not see a recession during mid-2023. However, this does not mean the housing market will crash.
The market is already experiencing a housing correction change, mostly due to the none stopping rising mortgage rates.
The housing market will not crash in 2023, but it will keep declining, and it will reach its peak in mid-2023. At least, that is what Wells Fargo Predicts. This means that if you buy a house right now. Most likely than not, it will be worth less next year. And for sure A LOT less than if you bought it last year.
Will House Prices go Down in 2023?
With an increase in mortgage rates, inventory, and lower and lower demand (Buyers forced out of the market due to the high mortgage rates). It is quite safe to assume that prices will keep going down. The problem is that almost “magically” interest rates could come back down. However, this is unlikely to happen, and it is predicted to keep rising through 2023. I recommend you, though, to keep a close eye on them.
Will House Prices Increase in 2023?
No, they won’t! And do not take my word for it. But, an expert panel of 107 survey respondents in a Norada Real Estate poll unanimously called for home price deceleration in 2023.
It’s hard to tell the difference at this point. But just think of it this way… People were okay with overpaying for a house in 2021 when mortgage rates were so low. Do you think they still would be okay with that move with the rising of the same? I think not!
If you want to know more about the right time to sell your property, read
Will 2023 be a Better Year to Buy a Home?
This is where you need to do some math and crunch numbers to find out what will be best for you (as a buyer). Think about it. Prices will go down, but mortgage rates will go up. So you may pay less for the house itself, but you will pay more for the loan. And at the end of the day, you may pay about the same as you would now, but more of it will go toward the loan rather than your new house.
If you are a cash buyer, this is good news since you do not have to worry about mortgage rates.
Will Interest Rates Drop in 2023
It is not very likely that will happen. Most Bank executives or leaders expect it to keep rising all through 2023. However, many things must take place and settle down before you can have a strong opinion on this.
I will recommend you just keep an eye out on this subject and plan accordingly as things unfold and take place. But everything so far points to rates increasing.
Real Estate Housing Market 2023 Conclusion.
Most experts agree that the real estate housing market in 2023 will become a buyer’s market.
However, a few people disagree with this, and many factors have to play out before we can be completely certain of the outcome.
So my suggestion to you is to keep informing yourself and reading. Check how the market changes daily, which will help you make a better and more informed decision.