2022 housing market takeaways and what can be predicted for 2023
The housing market historically has been a fluctuation of ups and downs. 2022 was on a downtrend from a previous hot market. With inflation at a 40+ year high, the Federal Reserve stepped in to raise the fed funds rate, which in turn impacted mortgage rates considerably. The rapid rise in interest rates affected many homebuyers to delay their search as they now become fence-sitters. With uncertainty comes hesitation to make any unnecessary moves, resulting in a shortage of inventory that comes with an already historical low in housing supply. What does this mean for 2023?
Buyers are looking for predictability when it comes to making decisions on buying or selling real estate. While we can’t predict exactly what is going to happen this next year, we can look at some of the trends and factors that can give us a pretty good idea. Inflation is looking to continue its trend downward as the Federal Reserve continues to raise the fed funds rate. Once inflation cools off, we can expect a halt in fed funds rate hikes and maybe even some reductions towards the second half of 2023. This will result in lower mortgage interest rates and get some of the fence sitters back in the market which will ultimately lead to an increase in housing demand and more people looking to sell knowing they can get a comparable interest rate on a new home. When we see this uptrend in the market it’s likely to move fast; be prepared by having a plan in place with your lender.
The question a lot of buyers have is, is it the right time? The answer for that is, if you can financially afford to make a move and homeownership is your dream then yes now is the right time. History generally doesn’t repeat, but it does rhyme, then you can expect housing appreciation in the long run, making housing a stable investment for you and your family’s future. Don’t let doom and gloom headlines scare you away from your dream, there is no time like the present.
If you have more questions about what the next year may look like for housing, contact one of our professionals today.