Will It Be Easier to Purchase a Home in 2023?

The U.S. housing market has seen its ups and downs, but the past couple of years have been particularly hectic. In 2020, mortgage rates plummeted to historic lows and prospective buyers rushed in on the opportunity. Increased competition and bidding wars were followed by climbing home prices. In 2022, the buying frenzy finally came to an end and the market began to settle down, but home prices remained high. Now, as the new year approaches, prospective buyers are eager to know – will it be easier to purchase a home in 2023? Here’s what the experts are saying.

What Will Happen to the Housing Market in 2023?

Whether you’re buying a home for the first time or are considering purchasing an investment home, timing is critical. Timing your investment appropriately can result in a better outcome and could help you get a lower mortgage rate or a lower price on the home of your dreams.

That being said, you may be curious to know what will happen to the housing market in 2023. Will the recession cause home prices to plummet? Will mortgage rates eventually come down or will they remain high well into 2024? Here’s what experts are predicting for the coming year.

Lower Prices

Most experts agree that home prices will come down in 2023, but how much remains a matter in question. Some experts are saying that we could see prices drop as much as 20%. Others are saying that prices will come down, but not as much, and expect a drop of about 5-10%.

This could be good news for prospective homebuyers. While mortgage rates remain higher than they were in 2020 and 2021, lower home prices could help offset some of the cost.

Improving Mortgage Rates

If you’re looking to purchase a home, but are waiting for rates to come down, 2023 could be your year. It’s impossible to say exactly where mortgage rates will end up next year. Right now, predictions range widely. However, the Mortgage Bankers Association is confident in their belief that rates will come down. They recently stated they expect rates to end up at about 5.4% by the end of 2023.

More Options for Buyers

The housing inventory hit record lows in 2020 and 2021. But now it looks as if inventory is steadily increasing. In September of 2022, the number of homes available for sale was up 27% compared to the year prior. Experts are predicting that because of the slowed state of the economy and the increase in new construction homes, inventory will continue to grow. However, it may be some time before supply outweighs demand. Slight as the increase may be, it still means more options for those who are able to afford to purchase a home next year.