Housing Market Trends for 2023

Are you interested in the housing market trends for 2023? With the economy continuing to recover from the pandemic, the housing market is expected to be more competitive than ever. 

In this article, we will take a look at the housing market trends for 2023, including:

• Current mortgage rates
• The impact of rising home prices
• The potential for foreclosure 

We’ll also look at what to expect in terms of rental markets and the effect of new construction on the overall housing market. With all this information in mind, you’ll be ready to make the right decisions when it comes to buying or selling a home in 2023.

Overview of the housing market

The housing market is everything that has to do with buying and selling homes. This includes the residential and commercial real estate markets as well as the secondary market, which is made up of: 

• Mortgage lending
• Brokerages
• Insurance 

The level of activity in these markets is tied to the economy. For example, the demand for housing depends on things like population growth and the number of jobs available. 

The housing market is a complex system with many variables affecting it. This makes it difficult to predict exactly where the market will go in the coming years.

Among the economic factors that can greatly affect the housing market are the following:

• Interest rates
• Inflation
• Unemployment
• Availability and cost of financing

The health of the overall economy will also have a large effect on the housing market. People often buy real estate as a long-term investment or as a way to make extra money, like by renting it out.

Mortgage rates

With the increasing inflation of 2022, mortgage rates have been steadily rising. At the beginning of November 2022, the average mortgage interest rate was 6.95% (for 30-year fixed mortgages) and 6.29% (for 15-year fixed mortgages). Many experts expect these rates to stay somewhere around 7% for the rest of the year and potentially beyond that.

This, of course, depends on the further development of the inflation rate. A further increase in mortgage rates would mean that the housing market would slow down.

On the other hand, at the end of November 2022, it was reported that for 2023, both Government-sponsored Enterprises (GSE) Freddie Mac and Fannie Mae will back mortgages of more than 1 million (up to $1,089,300) USD for certain high-priced counties in the US. This marks a clear increase in loan limits.

Rising home prices

According to the Zillow Home Price Expectations Survey, the majority of experts think 2023 will be a clear buyers’ market. With the growth of home prices slowing down and a growing inventory, there is a noticeable shift between supply and demand, which will clearly favor the buyers who can have their pick among many more options than before.

Potential for foreclosure

It is important to remember that the federal pandemic protections that stopped homeowners from losing their homes to foreclosure because of problems caused by the COVID pandemic ended in 2021. This has already resulted in a steep increase in foreclosures in 2022.

You can find an overview of the foreclosure rates for all 50 US states in October 2022 here.

Depending on the factors already mentioned above, foreclosure rates can be expected to rise further in 2023. So, if you’re thinking about buying a home, it’s even more important for you to do your research and make an honest assessment of your own finances to see if you can really afford the home you want.

Rental market trends

The rental market has increased in recent years due to the growing number of people who prefer to rent rather than buy (or might not be able to afford to purchase a home.) This has led to an increase in the number of renters in many areas across the country. 

Zillow.com reports that the panelists of the Zillow Home Price Expectations Survey expect “an average of 5.4% rent growth throughout 2023,” therefore growing “more than inflation, stocks, and home values.”

A strong Home Inspection Partner in any Housing Market

Whatever the housing market will bring for 2023 and beyond, keep in mind that you have a reliable expert for your home inspection needs here in Florida! Email or call our teams in Tampa, St. Petersburg, or Brooksville for further information or to schedule your inspection! 

Further reading:

• https://www.forbes.com/sites/qai/2022/11/08/real-estate-trends-why-are-mortgage-rates-going-up-in-november-2022/?sh=50d3078346f1
• https://www.cnet.com/personal-finance/mortgages/mortgage-interest-rates-today/ 
• https://www.usatoday.com/story/money/personalfinance/real-estate/2022/11/30/fannie-mae-freddie-mac-guarantee-mortgages-over-1-million-2023/10799190002/
• https://www.zillow.com/research/zhpe-q3-2022-buyers-market-31481/#:~:text=The%20panelists%20predict%20an%20average%20of%205.4%25%20rent,has%20already%20spawned%20new%20supply%20in%20the%20pipeline
• https://www.zillow.com/research/zhpe-q3-2022-buyers-market-31481/#_ftn1
• https://www.sofi.com/learn/content/foreclosure-rates-for-50-states/