2022 was a tumultuous year for real estate. The Federal Reserve (the Fed), acting to curb and reverse inflation, increased interest rates which caused mortgage rates to rise. Rates more than doubled in the calendar year—something that has never happened before. This historic event was a shock to the market and the result was a huge shift in the real estate market.
What does this mean for anyone trying to sell their home and the housing market at large in 2023?
What happens next is based on inflation.
Experts agree: what happens with the housing market in 2023 will be led by inflation. If inflation stays high, mortgage rates will stay high. If inflation moderates, rates should follow. As Greg McBride, Chief Financial Analyst at Bankrate, explains, “mortgage rates could pull back meaningfully next year if inflation pressures ease.” For the market to stabilize, the Fed will need to bring inflation down and keep it there.
Experts predict inflation will decline.
We did see inflation start to ease at the end of 2022. Kiplinger’s Economic Outlook tells us that “inflation eased further in November , to 7.1%: The fifth consecutive month of decline. While the yearly rate is still high, this marks a shift away from strong monthly price increases. The slowing economy is likely to bring the yearly inflation rate down to 3.2% by the end of 2023.” Many experts expect inflation to continue this decline through 2023. The Fed is working to cool demand, and the outlook is positive.
Experts predict the real estate market will stabilize.
Real estate predictions take these inflation predictions into account. In this 2023 Housing Market Forecast, you can see that experts don’t agree on the exact numbers, but the overall outlook is positive:
Home price appreciation will vary, but should average out to be neutral. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains: “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.”
Mortgage rates will likely fall a bit, and home sales will moderate. Overall, 2023 will be a steadier year for real estate. If you’d like to take a closer look at the rate projections, here’s what experts from the major mortgage and real estate groups are predicting:
What does this mean for you?
We just covered a lot of information. You now know that the 2023 housing market will be defined by inflation. You understand the expert predictions about the economy in general and the real estate market specifically. What does this mean for you?
If you’re considering buying your dream home in 2023, don’t let hesitations about the market stop you. The real estate market should stabilize this year, and interest rates will likely be lowering.
You don’t have to wait until rates go down to get your dream home, though: when you work with MarketPro Homebuyers, you can get cash for your current home, no matter the condition. You can use that cash to “pay points” on your new mortgage, paying more upfront but getting a lower interest rate and paying less over time.
And you can sell fast. We can move as quickly as you would like. Afterall, if the predictions are correct, you’re not likely to earn equity on the home while you wait to sell it.
Work with MarketPro:
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, Pennsylvania, or Florida, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.