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A wealth of information and advice from the experts.

7 Predictions for the 2023 Housing Market 

I was recently asked to share my predictions for the 2023 housing market. Will mortgage interest rates continue to rise? What about home prices – will they come down in 2023? Should homeowners expect it to take longer to sell their homes in 2023? Will there be a greater or lesser supply of housing stock? 

These are all interesting questions and made me think. 

So here they go – 7 predictions for the 2023 housing market from a real estate investor who’s been loving his work in the field for over a decade!  

  1. In general, the housing market will be slower in 2023, at least in H1, primarily because of the high interest rates.  As interest rates reach unprecedented highs – hovering close to 7% for 30-year, fixed-rate mortgages – people are shelving their plans to buy homes, due to the added burden of high interest rates on their mortgages. 
  2. As we get closer to the 2024 presidential election, interest rates will likely decrease to the range of 5%. In pursuit of reelection the current government will do everything to engender a feeling of stability, prompting the Fed to dial down interest rates.
  3. While we will likely see prices drop slightly at the beginning of 2023, in the latter half of the year, we may be seeing stabilization and home prices rebounding. This is based on my prediction that interest rates will drop closer to the elections, consequentially warming up the market and raising housing prices. 
  4. Homeowners should be prepared for a longer waiting period to sell simply because people are not jumping at every opportunity. Again, we have the high interest rates to thank for the complacency in the housing market. For homeowners looking to sell, the next few months will be a test on their patience. 
  5. Due to diminished demand, houses will sit on the market longer, thus raising the housing inventory. Since housing demand has outsized supply for a while in the U.S., the coming period will shrink the gap somewhat, bringing more balance to housing supply and demand.  
  6. People who are not absolutely desperate to sell their homes may want to wait it out in 2023, for things to stabilize. Rather than selling during a dip, homeowners with a property in good condition are better off waiting out the year in anticipation of price rebounds. 
  7. People who have a burdensome property or people who have a reason they need to sell fast will likely turn to cash buyers. As cash buyers are not reliant on bank financing, the high interest rates do not affect them and they can carry out a quick and fair purchase, which can relieve homeowners burdened by a property they want/need to get rid of fast. 

These are my own ruminations based on a decade-plus of experience in the field. Looking around, I found some other reputable sources like Forbes and Bankrate that cite some similar predictions.

Brought to you by Steven Honig, Real Estate Investor & Consultant

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