What To Expect For 2023's Real Estate Market

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

Mortgage Rates

Most every expert agrees that the future of mortgage rates hinges on inflation. If it is high, then rates will be too and if it continues to fall, rates will follow. There have been signs that inflation is cooling but it is still on the radar these days. What experts are claiming now is that they expect rates to stabilize this year. It remains to be seen where they actually land 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 can expect home prices to still be defined by supply and demand. We experienced this for the past few years yet the landscape has shifted during 2022. Buyer demand has cooled due to the higher mortgage rates allowing supply to grow. Similar to mortgage rate predictions, we should look at 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 have to say, you see them hold steady for 2023. Every market is different where some were 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.”