What We Can Expect For 2023's Real Estate Market

The real estate market for last year in 2022 was most notable for inflation and a large  increase in mortgage rates. This all had a big impact on buyer activity where momentum slowed down forcing some buyers to hold off on making their home purchase. So what does this mean as we kick off the new year? Here is what some experts have to say.

Mortgage Rates

Most experts agree that the trend for mortgage rates hinges on inflation. If it is high, then rates will be too and if it continues to fall, rates will follow as well. There have been some signs that inflation is cooling but it is still on the radar these days. What experts are saying now is that they anticipate rates will stabilize this year. It remains to be seen where they fall to but if you average speculation from Freddie Mac, Fannie Mae, MBA and NAR you will see them arriving between mid 5% and mid 6%. 

Home Prices

We will probably see home prices to still be defined by supply and demand. We experienced this for the past few years yet the landscape has shifted during last year. Buyer demand has leveled off due to the higher mortgage rates which has allowed supply to grow. Just like mortgage rate predictions, we should consider the average of what experts forecast. Some feel we should see prices continue to rise, some feel they may fall. However, when you average what Realtor.com, HPES, NAR, Freddie Mac, MBA, Fannie Mae and Zelman forecast, you see them hold steady for 2023. Every market is different with some having been more overheated than others. So ultimately it makes sense that some may see drops while others will see increases this year. Lawrence Yun, Chief Economist of The National Association of Realtors puts it best by saying “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.”