What to expect from the 2023 housing market
Everyone knows 2022 was a rough year for home buyers. Interest rates more than doubled over the course of the year while housing prices only continued to climb.
But the tides are beginning to turn. Buyers have gained more leverage as homes sit on the market longer. And mortgage rates ticked back down in November and December.
Will things keep looking up in 2023? Or could the market overcorrect, leading to a crash? Here’s what buyers and homeowners can expect in the new year.
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Will the housing market get better in 2023?
Broadly, housing pros expect the market to moderate in the new year. Most predict a decline in home sales and at least a temporary drop in prices — although the industry is split on whether mortgage rates will rise or fall in 2023.
According to the National Association of Realtors, home sales are expected to decline by around 7%, while the national median home price will increase by 1%.
But keep in mind that annual projections could account for very different markets in the early and later parts of the year.
Ralph DiBugnara, president of Home Qualified, thinks the first quarter of 2023 could look very similar to the fourth quarter of 2022. “Home prices will be down between 5% and 10%, and mortgage rates will hold in the high 6% range,” he predicts.
But, “In the second half of the year, starting with the spring market, we will start to see interest rates reduced — possibly into the mid 5% range,” DiBugnara adds.
Jason Gelios, a Realtor in Southeast Michigan, agrees that 2023 could be more buyer-friendly.
“In 2023, many buyers will be able