Interest rates increasing certainly helped bring down some of the skyrocketing home prices that we saw in 2022. With several markets in the United States experiencing record-high home prices, the belief was that in 2023, interest rates would force the market to cool off a bit. However, there is still much debate regarding whether or not prices will begin to drop further in 2023. Continue reading to learn more about the housing market forecast for 2023 as of February.
The critical detail as to why the market has been so hot lately is demand. Buyers who purchased their homes over the last few years with low-interest rates don’t seem to plan on leaving anytime soon. The decline of new construction properties has also led to this spike in demand. Because of this, the lack of inventory has prevented prices from dwindling, causing many potential buyers to be skeptical about whether or not they can afford to buy right now.
Nevertheless, the prices have dipped from where they were over the last few years. According to economists, the trajectory of how low prices will fall in 2023 all depends on mortgage rates.
While many in the housing market are still questioning the current state of the economy – high inflation and climbing interest rates – the market does seem to be showing signs of balancing.
For starters, home prices dropping is the first we’ve seen since hitting a rapid rise in 2020. While it is still a slow, ongoing trend, this is the first hopeful sign for buyers who were previously unable to afford to buy.
Though the price drop hasn’t necessarily been where many hoped it would be, it has led to some buyers deciding to try. According to the Mortgage Bankers Association, mortgage rates began to increase in early January (although they have since fallen again). Regardless, many believe mortgage rates will continue to stabilize at around 6% in 2023.
Overall, early signs in 2023 show the market beginning to correct itself with prices slowly falling. As always, the Greater Boston real estate experts at Flow Realty can help you make informed decisions when choosing to buy or sell property. Contact Flow Realty today to learn more about real estate in 2023.