Cervone Deegan + Associates knows that the real estate market for 2022 was well known for inflation and a large increase in mortgage rates. This all had a significant impact on buyer activity where momentum cooled leaving some buyers applying the brakes on making their home purchase. So what does this mean for the new year? Here is what some experts are reporting.
Mortgage Rate Trends
The majority of experts agree that the future of mortgage rates hinges on inflation. If it is high, then rates will follow and if it continues to fall, rates will as well. There have been signals that inflation is starting to cool but it is still on the radar these days. What experts are stating now is that they expect rates to stabilize for 2023. It remains to be seen where they will hover but if you average speculation from Freddie Mac, Fannie Mae, MBA, and NAR you will see them arriving between mid-5 % and mid-6 %.
Home Prices Trends
We can expect home prices to continue to be defined by supply and demand. We saw this for the past few years yet the landscape has shifted during the year 2022. Buyer demand has cooled due to the higher mortgage rates allowing supply to grow. Not unlike mortgage rate predictions, we should look at the average of what experts are forecasting. Some feel we should see prices continue to increase, while some feel they may fall. However, when you average what realtor.com, HPES, NAR, Freddie Mac, MBA, Fannie Mae, and Zelman have to say, you see them hold steady for 2023. Each market is going to be different where some have been more overheated than others. So in the end it makes sense that some may see drops while others will see increases this year. Lawrence Yun, Chief Economist of The National Association of REALTORS® puts it best by saying “After a big boom over the past two years, there will essentially be no change nationally. Half of the country may experience small price gains, while the other half may see slight price declines.”