As we bid 2022 adieu, the question on our minds is, can we also say goodbye to sky-high mortgage rates, low inventory, and elevated prices in the market? 2022 saw soaring prices fueled by historically low mortgage rates; these, however, are a thing of the past as we end the year with current average mortgage rates of 7.32% for a 30-year loan. Many prospective buyers have been biding their time holding out for a housing market correction, while others are hoping for a housing bubble to emerge and pop. However, that doesn’t appear to be in the cards in 2023.
Join us as we explore expert predictions for the 2023 housing market.
Experts Weigh in - Real Estate Predictions for 2023
Realtor.com predicts that whether you’re buying or selling a home this year, the market will be just as challenging (or even more so) as last year. They also predict that mortgage rates will continue to increase and then dip slightly at the end of 2023. This means you can continue to expect home prices to increase.
There is no housing bubble to burst
If you’re waiting for a housing bubble to burst, you might be waiting for quite some time. According to US News and World Report, experts don’t see a housing bubble or a burst in our future anytime soon.
Bankrate says we’re currently experiencing a housing inventory shortage. They say this is partly due to rising material costs and supply chain issues. The company is predicting this issue to continue for “some time.”
How Jenuane Is Combating Inventory Shortage
Jenuane is committed to building high-quality homes and helping Northern Nevada families realize their dreams of homeownership. That means building and keeping an inventory of quick-delivery homes available for our customers.
Mortgage Rates to Rise?
Nasdaq is predicting mortgage rates will continue to go up, but not to the extreme we’ve been seeing at the close of 2022. And an economist for Zillow told Forbes magazine he predicts interest rates will remain roughly where they are now for most of 2023.
Experts Predict an Increase in Multi-Gen Living
The pandemic brought about an increase in multi-generational living, meaning parents, grandparents, and kids living together under one roof. Many experts expect this trend to continue and even rise in 2023. Jenuane is proud to be at the forefront of building homes designed specifically for this growing need, with floorplans created for multi-gen living.
Increase in 1st-Time Landlords
Zillow is predicting 2023 will bring about a surge of first-time landlords. According to Zillow, “This is because many mom-and-pop investors bought second homes during the pandemic when mortgage rates were at a record low. Now, with rising rent prices, Zillow expects these homeowners to capitalize.”
Why Buying a Home is Still a Good Investment
Rising interest rates and inflation have caused many people to put off buying a home. But that’s the opposite of what you should do during times like this. One way to help shield yourself from the effects of inflation is homeownership.
Rents are already rising, and as inflation and mortgage rates continue to go up, so will rent. Since rent is likely your most considerable expense, that’s a significant loss of income.
How Buying a Home Can Protect You from Inflation
Buying a home helps to protect you from inflation. Even if mortgage rates and home prices are up, your monthly payment is locked in when you buy a home, and unlike renting, you’ll begin to grow your investment through home equity. Nearly every year, rent prices go up, but the mortgage you lock in during 2023 will be the same in 2033 and 2043, and so on. So in just a few decades, people will pay more for their rental than you pay to own your house.
Homebuying Costs Are Not Going Down
As with rent, the same can be said of the cost of homes. In general, they don’t tend to go down. The general direction is nearly always up. So even though mortgage rates and inflation are on the rise, when you look at the cost of purchasing a home in the long term, you would’ve been better off if you bought a new house last year. So, with that said, don’t wait. Now is the time to buy a home; even just a few years from now, you’ll be glad you did.
Take Advantage of Promotions Before they’re Gone
How would you like to be able to move into a newly built home? Many new build communities offer rate buy downs and other promotional offers to help combat those rising interest rates and make buying a new home more affordable. So if this sounds like something you would be interested in, it’s good to get on their Priority VIP list.
Jenuane Communities and our preferred lender, Guild Mortgage, are willing to buy down your interest rate. This mortgage rate buy-down program will lower your interest rates for the entire term of the loan in exchange for a small upfront fee. If this sounds like something you would be interested in taking advantage of, reach out to us today.