2023 Housing Market Trends
Tips for Buying and Selling in 2023
If you're going to be buying or selling this year, keep the following tips and tricks in mind to ensure you have the best possible experience:
Selling Your House
If you live in the right area and it's time to sell your house this year, remember the following:
- Find the best agent: A successful sale depends on getting the right people on your team. Take your time researching the best agent for you — look for one who knows your area well and has excellent reviews from other sellers.
- Set realistic expectations: Remember, 2023 is a new year with new prices. Ensure your expectations align with market trends to connect with buyers and get your sale.
- Make small changes: Get your house ready to sell by making small changes. You can clean and declutter to make the rooms look bigger, make the house smell pleasant and even hire a professional photographer. Be wary of making significant changes and renovations in the current market. Your home's market value must reflect your upgrades to ensure you get your money back.
Buying a House
Are you planning on buying a home? Keep the following tips in mind:
- Set your budget: Decide on your budget in advance and stick to your chosen number. Mortgage rates are still close to 7%, and you want complete financial confidence when buying a home.
- Understand your market: Monitoring your local market is vital when buying a home. Are there new developments on the horizon? They could mean more competition if you want a brand new house or less if you're looking for an established neighborhood. Knowing what's happening in your area gives you an idea of how long you can take to consider your decision.
- Be patient: Homes are on the market for a median of 75 days, so stay calm and wait for the perfect home to come on the market. Rather than rushing into a purchase, take the time to think it over.
Whether you're looking to buy or sell, you need to know what's happening in the housing market this year. After the last couple of years, it may feel like there will always be a better time to make that big move. Well, it's time to start stockpiling boxes — 2023 might be your year.
At the end of 2022, home purchases increased for three consecutive months, which could signal the positive shift we've all been waiting for. While economists have mixed views on the housing market this year, they agree there are some trends to keep your eye on. Let's take a look at the 2023 housing market trends so that we can build some financial confidence for the coming year.
The 4 Housing Market Trends You Need to Know About in 2023
While predicting the future of the homebuying market is a challenge, some trends to watch out for include the following:
1. Increased Activity This Spring
Housing markets often see increased activity in the spring. This year, though, real estate agents have reported an early surge in the spring market. Homebuilders also speak of an increase in demand. If you're selling, you may see more interest in springtime. Some realtors have even noted the return of bidding wars in early 2023.
Mortgage rates have trended lower over the last few months, making homes more affordable to buyers. Home accessibility increases the demand for houses and brings buyers into the market, which makes the market more competitive.
2. More New Construction
In October 2022, new home construction was up 42% from pre-pandemic rates. You can expect more new homes on the market than existing ones soon. The higher number of newly available homes is driving construction prices down, which could overflow into the existing home market.
Builders will want to sell as soon as possible. They may choose to encourage buyers with lower prices and mortgage rates for new construction. Many owners are also looking at construction with rentals in mind, especially in the case of multi-family units.
3. Falling Mortgage Rates
Mortgage rates are already down in early 2023. Although there's no guarantee about whether they'll hold for the rest of the year, economists remain hopeful.
Some economists predict that the inflation rate will slow down in the latter half of 2023, which gives mortgage rates a chance of stabilizing below 6%. Since there's a chance of falling mortgage rates, getting into the homebuying market in 2023 may be fruitful.
4. Greater Demand in the Midwest
The Midwest has avoided significant home price increases compared to the rest of the U.S. Lower prices mean smaller down payments, which can mean lower mortgage payments even if the rate rises again.
Home buyers are likely to look for homes in areas like Iowa, Ohio, Illinois and Kansas. These states are an excellent choice for first-time home buyers, as mortgage-to-income ratios are below the national average.
Many Midwest metros, such as St. Louis, Missouri, have good housing inventories since sellers are more comfortable putting their homes on the market here. If you're a first-time home buyer, keep the Midwest in mind.
Housing Market FAQs
It's crucial to consider all your options before diving into the current housing market. Let's have a quick look at a couple of housing market FAQs to help you cement your decision for the coming year:
- Should I Buy a House in 2023? Buying a home is a big step in any housing market. The most important factor is whether you're in good financial shape to make this move. Consider your budget and estimate your monthly housing costs based on your down payment and mortgage rate. While you should be aware of overextending yourself, you might miss out on your dream home if you wait too long. If you see a home you love that's within your budget, consider taking the plunge.
- Should I Sell My House in 2023? Selling your home is a personal decision, and waiting until 2024 might not be an option. If you plan to sell in 2023, remember that the market will likely be slower. Set realistic expectations and time your listing correctly. Spring and summer could be good times to put your home on the market.
Explore Our Mortgage Options at First Commonwealth Bank
Your dream house could be just around the corner. At First Commonwealth Bank, we want to help you secure the home of your dreams. Our experienced teammates are available to talk you through financing your home. We offer a wide range of mortgage options to suit your unique needs, and we'll be there for every step of your application.
When it's time to buy a home, let us help you. Please schedule an appointment to learn more about how we can help you achieve your homeownership goals this year.