Housing Market Outlook for 2023: What You Need to Know
After a couple of shaky years, many Americans have burning questions about the housing market outlook for 2023 and how it affects them. Speculations of housing market crashes and stabilization offer few solid answers. As Tucson’s trusted mortgage brokers, we’re happy to provide some perspective.
Will the housing market favor buyers or sellers? While the shift remains somewhat stagnant in 2023, it will likely swerve slightly to favor buyers. Low inventory levels leave little for the buyer’s market. However, this advantageous shift has other consequences.
Lower availability comes with fewer choices. Plus, economic insecurity and inflation continue to create problems for a market of waiting buyers. Add increased mortgage rates to the equation, and you have a mostly balanced real estate market that only slightly benefits buyers.
What does a slightly buyer-friendly housing market mean for sellers? If sellers want to finalize sales, they must bring down housing prices to make purchases attractive to buyers battling increased mortgage and general inflation problems. People who own low-rate properties won’t risk an inflated purchase paired with a higher mortgage rate.
Sellers can take one of two routes. They can hold properties until the unpredictable market moves solidly in their favor. Or, they can lower their properties’ prices to attract more buyers and, therefore, more bidders.
Mortgage and Interest Rates
Increased interest rates mean a higher monthly payment on your mortgage. Multiple chief economists predict that short-term risk factors, including geopolitical tension and recession dangers, will contribute to 15-year fixed mortgage rates meeting 30-year fixed mortgage rates.
Three different scenarios may unfold:
- Mortgage rates remain inflated, causing interest rates to climb. The cycle repeats continuously, making house purchases more unappealing.
- Inflation finally begins a downward slope, and mortgage rates stabilize and stagnate.
- The feared recession finally occurs, causing rates to decrease to five percent.
Regardless of whether other economic factors gain balance as the year progresses, the housing market has the lowest level of inventory many have seen in years. The economy’s health hangs in the balance with the best-case scenario involving stabilization. Thus, the overall housing market outlook in 2023 shows a mostly balanced market that only slightly favors buyers.
Most would-be buyers, however, will likely hold back due to the unpredictable and unfavorable state of the economy’s other aspects. However, we could see an encouraging uptick later in the year as housing inventories slowly increase, stimulating the economy further.
Improve Your Housing Market Outlook for 2023 With Priority Lending
At Priority Lending, our mortgage experts are committed to providing resources and information about navigating an unpredictable economy. We’ll help you maneuver an erratic housing market to find a property to call home with simple mortgage applications, affordable payments, and prequalification options. Discover more ways to find balance and stay educated about pertinent topics like what happens to your mortgage if the housing market crashes. Gauge how the 2023 housing market outlook might affect you. Get your free, informative consultation by calling us at 520-531-1119.