2023 Real Estate Predictions 🪩
No crystal balls here, just disco... On a national level, average home appreciation typically ranges from 3.5-3.8%. Seem pretty low? If you just recently started your homeownership journey, you're probably used to appreciation rates at closer to 20%. The last few years have been anything but typical. The National Association of Realtors recently stated they believe home values will appreciate 1.2% next year. And then they believe they will go back up again in 2024. They are also predicting mortgage interest rates will settle around 5.5-6% mid-2023. Lawrence Yun, chief economist for the National Association of Realtors, expects the rate to settle at 5.7%. He predicts the probability of a market crash is small.
“It’s going to be a tough year for homebuyers, home sellers, and the overall housing market,” says Realtor.com Chief Economist Danielle Hale. But “we’re going to take some steps toward a better balance between buyers and sellers.” The real estate market always ebbs and flows. While we may not see rates as low as 2.5% again any time soon, we can breathe a sigh of relief knowing we likely won't see rates at 20% again, either.
Hale predicts 2022 existing-home sales to add up to about 5.3mil, down 13.8% from 2021, and to decrease another 14.1% in 2023 to 4.5 mil. “The deceleration in home sales is likely to continue as high home prices and mortgage rates limit the pool of eligible home buyers,” she said.
However, we’re still nowhere near a true buyer’s market. “A buyer’s market is usually defined as having more than six months of available inventory, and the last time we reached that level was in 2012 when we were recovering from the housing bubble. To get to six months of inventory, we would have to reach 2 million listings, which hasn’t happened since 2015. In addition, monthly sales would have to drop to below 325,000, a number we haven’t seen in over a decade.” - Matthew Gardner, chief economist for Windermere
The truth is, the market is always shifting, so the most ideal time to move is whenever it's most ideal for you. Moving is never an easy decision, especially when the market feels confusing. If you are feeling that confusion and would like to talk it over with someone who truly has your best interest in mind, let’s connect!
