7 economists and real estate experts on what will happen in the housing market this spring
2022 sees higher home prices and higher mortgage rates put off many buyers. So what’s in store for spring 2023? Here are more predictions from the experts.
Prediction 1: Mortgage rate is a wildcard
“Buyers who have been sidelined may be encouraged by mortgage rates, which fell from a high of more than 7% in November to just around 6% in early February. But while many predicted rates would fall this year, mortgage rates spiked in early February, suggesting that no one can count on a consistent downward trajectory for rates this year. . If interest rates rise in March, buyers could exit immediately as more sellers are planning to list their homes, said Jeff Tucker, senior economist at Zillow. See the lowest mortgage rates you can get right here.
For her part, Nadia Evangeliou, senior economist at NAR and director of real estate research, said: “With mortgage rates expected to stabilize below 6% in the second half of the year, many Americans will be more likely to become homeowners, helping to increase home ownership rates.”
And Holden Lewis, home and mortgage expert at NerdWallet, said: “The biggest events of the month will be the release of the consumer price index on March 14 and the Fed’s monetary policy meeting will be ends March 22. If inflation doesn’t slow significantly, the Fed will maintain its positive stance and that could push mortgage rates higher and home prices lower. But if inflation cools, the pressure to raise mortgage rates will ease.” See the lowest mortgage rates you can get right here.
Prediction 2: The price will be relatively stable
Entering March and officially starting spring, experts think that prices are likely to stabilize. Aaron Kirman, founder of AKG Christie’s International Real Estate, said: “We still see market volatility as interest rates continue to rise, but I think prices will be near steady as we remain short on inventory.
Jacob Channel, senior economist at LendingTree, notes: “Price will likely be more or less close to current levels in March. Not all real estate markets work in exactly the same way, so there will be some price fluctuations depending on where a person lives or is looking to buy, however, the majority of Americans do not. should expect any sharp price changes in the real estate market. immediate future.”
That said, we could see prices pick up a bit: “Price declines are stalling as U.S. home values fell just 0.1% from December to January and maintained a 6.2% gain. annual. Inventories are still low, adding fuel to the fire and making the market more competitive as buyers scramble for limited options, so I assume that will push prices up at least a bit during the month. 3,” Tucker said.
Prediction 3: There will be more people looking to buy
This is the season for buyers to start their home hunt. “Buyers are expected to grow in March as usual at this time of year, and more sellers will be listing their homes than in January or February,” Tucker said. See the lowest mortgage rates you can get right here.
Prediction 4: Housing inventory will remain an issue
“A large number of homeowners who have refinanced over the past few years at historically low interest rates and forego that and for a payoff just 7% a hair away means people are choosing stay unless they really have to. Homeowners are actually sheltering in place, hoping the rate will drop and other homeowners will lower their prices so they can get what they want. The problem is that everyone is doing this concurrently causing deadlocks in the real estate version. Unless we see interest rates fall, we should see this trend continue into March, said Dave Spears, general manager of brokerages at Houwzer, a mortgage and real estate brokerage.
That inventory shortage is one reason prices aren’t expected to drop too much. “Inventories are low enough, especially at prices below $400,000, to keep a floor in most markets. Some of the hottest markets for 2020-2022 are cooling off now, with falling demand and rising inventories leaving those regions vulnerable to continued price declines. Greg McBride, director of financial analysis at Bankrate, said a rise in mortgage rates in February could scupper hopes of a rebound in home-buying activity in the spring.
Prediction 5: Buyers will snag a second home
“House remains a key investment for the world’s wealthiest citizens and a safe haven against inflation,” said Mauricio Umansky, CEO of billion-dollar brokerage The Agency. “The luxury market is thriving and there is a lot of wealth distributed across markets and generations. I think a lot of buyers are still willing to buy and are waiting together for the next move once the market has stabilized. Now the ultimate buyer can buy a property at a more realistic price without being outbid outright. We are also seeing interesting trends that I believe will continue as buyers buy what will be considered their second homes first, using them as investment properties. With the US dollar still strong, buyers will continue to look abroad for their next purchase, from Mexico to Canada and from Europe to Asia.”
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