What can home buyers and sellers expect from the housing market in 2023?
Experts from across the real estate industry have weighed in, and here are a handful of their predictions for interest rates, home prices, specific markets, and more.
Quick disclaimer: While highly credible analysts, forecasters, and data are behind these predictions, the forecasting below simply features educated guesses, based on recent trends, the latest numbers, market shifts, professional insights, and complex calculations. None of these predictions is intended to be a statement of fact.
In the fight against inflation, the Federal Reserve has raised interest rates, and those rates may continue to increase with ongoing market volatility. That has some experts predicting that:
- Mortgage interest rates could continue to climb in 2023.
- If they do, more homebuyers may be pushed out of the market.
- Homebuyer demand could decline.
- If or when a recession hits, interest rates will likely come back down.
Listing prices for houses soared in several areas in 2022, with the average price for homes sold increasing roughly 15% from 2022, when compared to 2021. That boom will likely slow down substantially in 2023 if you believe the analysts. They say rising mortgage interest rates are sparking the deceleration in home prices.
In fact, economists have said that June to July 2022 reflected one the largest decelerations in housing prices in U.S. history — and that:
- The cooling off on housing prices should continue into 2023.
- Areas, like Austin, TX, that saw some of the sharpest increases in home prices during the pandemic will likely see some of the sharpest declines in housing prices in 2023.
While 2022 has been marked by fairly low housing inventories in many markets nationwide, there are good chances that could turn around in 2023.
In fact, many industry experts say that the combination of rising interest rates and falling home prices could result in more available houses on the market. That could mean far more supply and options than homebuyers have had in recent years.
Although experts disagree about when the shift to a buyers’ market will happen, many say that it’ll be sometime in 2023. That’s because homebuyers who have not been shut out of the market by rising interest rates will likely have:
- Large inventories to choose from
- Not a lot of competition from other potential buyers
- Stronger negotiating power when it comes to closing costs and/or getting the seller to make concessions
Some homebuyers may even decide to sit on the sidelines to wait and see what happens with interest rates, home prices, and the markets before they make a major investment.
While some of the above housing market predictions for 2023 may come to fruition in the coming months, no matter what happens, both homebuyers and home sellers can benefit from working with an experienced Realtor who has their finger on the pulse of the industry and markets — and who can provide essential guidance whenever it’s time to buy or sell a home.
Whether you’re buying or selling a home in Texas, you can get experienced help and cash back at closing when you work with the 5-star Realtors® at New Home Gurus. We can guide you through the process, helping you with offers, negotiations, and closing. Plus, we’ll split our commission with you at closing!
Home sellers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.
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