Home Prices in 2023
Home prices in 2023 are expected to hit rock bottom and become more affordable, experts predict. According to a recent survey by Zillow, home prices are predicted to drop by 1.6% through the end of the year, nationally, with the highest declines in expensive metro areas. However, over the next four years, growth is expected to average 3.5%, comparable to the long-term average.
The current reset of the housing market is expected to limit price declines and help buyers catch up, especially with the sheer number of people in the first-time homebuyer age range and a lack of inventory. Although affordability constraints have limited demand for housing, experts predict that the return to more normal growth will help homebuyers in the long run.
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According to a published article in Go Banking Rates, lower mortgage rates in January have brought some buyers back into the market, but current rates (for a 30-year fixed mortgage) are closing in at 7%, making it difficult for potential buyers to take action. However, Zillow’s expert panel believes that mortgage rates could trend downward after the first quarter, which could significantly help with affordability.
Sales of existing homes are predicted to fall to 2.3 million this year from 5 million in 2022, and new construction may pick up to meet the need for inventory. Home builders have also given buyers financial incentives to help overcome affordability challenges.
In conclusion, home prices in 2023 are expected to decrease and return to more normal growth rates, homebuyers may finally have a chance to catch up and invest in their dream homes. For that reason, it will offer affordable homeownership opportunities for those waiting to enter the market. The experts predict that the rollercoaster ride of home prices will end, and a more stable and favorable market for buyers will emerge shortly.
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