8 Trends to Watch In the 2023 Housing Market
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Published Date: 2023-11-08
Although demand is still high and home prices are starting to even out, there’s still a bit of a slow period happening when the housing market is usually bustling with activity. Is that indicative of what’s to come for the rest of 2023? Experts say not necessarily, anticipating that mortgage rates will even out by the end of the year and single-family home construction will address the high demand for housing.
Here are eight trends you should keep an eye on for the rest of this year if you’re buying, selling, or otherwise getting involved in the housing market.
- Rates will peak before they drop
Although stability is on the horizon, the Federal Reserve has mentioned that there might be more increases first. Inflation is continuing to cool, which helps, but again, that will take time.
- Inventory will increase
Some experts say low inventory will remain the trend throughout the year, while others say that once rates drop to a more reasonable range, the backlog should clear. However, home construction is helping fill inventory demand with a 20% increase in new home sales since 2021.
- Home prices will drop
Most experts expect home prices to drop through the end of the year. As inflation continues to level out, it’s expected to see less outbidding and overpricing.
- The market will remain balanced
The rest of the year should remain balanced in terms of being a buyer’s market versus a seller’s market. The back-and-forth of inventory and demand, along with rate concerns, will be the biggest reasons.
- Cities are seeing more families moving in
More families are moving into Sun Belt cities and regions, where markets are still strong and demand is high. Cold climates are being abandoned more than usual.
- Many would-be homeowners choose to keep renting
Because of all the uncertainty and inventory issues, many would-be buyers continue to rent, choosing apartment rentals or month-to-month rentals on houses, condos, and other properties.
- Markets will vary regionally
As usual, the housing markets will vary from region to region, but the information in this post is a general guide.
- The bottom line of 2023: Uncertainty
Inventory could go up; prices could go down. Rates could rise before they fall again, and inflation may have an impact on all of it. Although there is a lot that we don’t know, there’s one thing everyone agrees on: expect uncertainty.
