What to Expect from the Housing Market in 2023

What to Expect from the Housing Market in 2023

As we close the chapter on 2022, homeowners and real estate professionals alike hope to turn the page on the housing market in 2023. Considering the lingering issues on inflation, housing inventory and interest rates, many wonder if these issues will impact their housing or financial status in the near future. Reviewing the various pricing forecasts and predictions of industry experts, let’s discuss the predictions buyers and sellers should keep in mind for the housing market in 2023.

Reverse Mortgages, Explained! 

Learn about reverse mortgages with our helpful infographic. 


Expectations for the Housing Market in 2023 

2023 Inflation and Interest Rates 

In less than one week, buyers and sellers will enter the housing market in 2023; however, the impact of inflation still dampens market enthusiasm with ever-growing interest rates. According to housing experts, though, these rising rates could potentially pull home sales and mortgage rates in several different directions.  

Currently, U.S. inflation rates are set at 7.7%, threatening to turn away new homebuyers from the residential market toward cheaper rental listings. However, this does not mean that homeownership is out of the question. Rather, experts predict if inflation rates drop towards the ideal rate around 2% then the housing market could see a surge of activity, particularly in mortgages as rates would drop and enable better buying opportunities. For optimistic real experts and investors, 2023 is anticipated to drop prices in the hopes of restoring pre-pandemic rates.  

On the other hand, some experts perceive more difficulty in next year’s market. With inflation rates fluctuating daily and low inventory in the housing market, concerns abound that housing prices and costs will remain around the higher end of 7%. Should prices fall at all, it is believed that the difference will not mitigate affordability for buyers due to high rates across the market.  

Waiting for sudden rate changes or improvements won’t help either buyers or sellers. Since inflation rates tend to affect the housing market differently throughout the United States, a sudden turnover in 2023 could do very little to improve housing prices anytime soon.  

Conflicting Reviews of Spring Housing Market Sales 

Mixed reviews continue as reports are taken of how inflation and interest rates will alter the future sales in the housing market in 2023. In recent reports, many predict that the real estate market will shift into a buyer’s market—a stark change from the long-standing seller’s market endured since the pandemic—due to many homeowners hoping to downsize to smaller properties. In turn, this turnaround in activity hopes to increase property options in the housing market, bringing prices down and competition back up after years of little productivity.  

On the other hand, there are experts that still believe that the housing market will remain stagnant in 2023. Home sales in particular are expected to dive anywhere between 12-31% in January 2023 as high mortgage rates make residential and commercial housing nearly impossible to afford. 

In short, homeowners will only move out of necessity rather than desire. Individuals needing to downsize and save up retirement income likewise will observe this strain on their finances. Thus, the worst-case scenario expected for the housing market in 2023 is that real estate becomes a ‘no-man’s land’, halting to an economic standstill where neither buyers nor sellers can benefit.  

PCL Housing Market in 2023 Inflation Rates Could Stall Home Sales

If high inflation rates continue, the housing market in 2023 could stall, dropping sales and leaving potential homes abandoned. 

The Rising Star of the Housing Market in 2023: Mortgages 

Despite the conflicting views on real estate sales or development for next year, a slight silver lining remains for homebuyers to access housing opportunities in the coming months. So, how can buyers expect to find properties in 2023?  Simple: home mortgages.  

According to Forbes’ recent report, mortgage rates have dropped nearly .20%, and are predicted to fall going into January. As of now, 30-year mortgages are set at 6.61% whilst 15-year fixed-rate mortgages are now 5.77%--as opposed to their previous 6.8% and 6.06% ratings, respectively.  

While not at the ideal rates homebuyers hope for, the decline for mortgage rates hopes to take center stage in 2023, potentially bringing more activity to the housing market despite high interest rates.  

Regardless of how home loans are rated in the coming year, though, homebuyers looking to defend against high inflation and save their income for the future can rely on reverse mortgages for support. Unlike other home mortgages, reverse mortgages remain stable and consistently rated, as they are unaffected by interest rates. In reality, reverse mortgages allow homeowners to utilize their home value as equity, thereby preserving their personal savings with a highly successful inflation hedge. Should inflation continue to rise within the housing market in 2023, borrowers using a reverse mortgage can anticipate more funds at their disposal since home values will likewise increase on the market.  

Rely on PCL’s Mortgage Expertise in 2023 

Whether or not inflation carries into the new year, homeowners can expect mortgages and reverse mortgages to offer more affordable housing options for buyers. In that same vein, sellers can withhold from the housing market in 2023 and invest in a home equity loan to secure their future savings. With the expertise from PCL Financial Group’s mortgage advisors, ensure your finances and housing status for the future with our professional guidance. To learn more about our mortgage options, contact us at PCL Financial Group now! 

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