An Early Take on 2023’s Market
Let’s take a look back at the mortgage and real estate world we lived in throughout 2022, shall we? To be succinct, it was a tough time for the market. Interest rates continuously jumped, more than doubling over the course of the year while simultaneously home prices rose… Over and over again. After living through the glory of the pandemic housing market boom, 2022 conditions were simply challenging.
Luckily, as we look toward 2023 we are beginning to see the tables turn. Our markets have generally cooled, which has typically led homes to sit on the market longer. That doesn’t seem like a positive thing… But when homes sit stagnant, buyer leverage increases. When you look at it that way, especially in comparison to how heavily the market favored sellers over the past few years, that can definitely be seen as a win for those who are looking to purchase a home this next year.
Moving into the year ahead, the Fed has indicated that the economy’s growth will be slow while unemployment rates increase. Again, another scenario that has an unexpected positive twist… These factors tend to correlate to lower long-term mortgage interest rates. Home buyers should expect to see a friendlier environment next year as rates see less volatility. A decrease in volatility, however, does not equate to zero volatility; buyers still need to be vigilant in communicating regularly with their Loan Officer; while rates shift, budgets must follow suit. It will be crucial for buyers to know exactly how a changing market affects their home buying qualification.
So where does that place potential buyers in 2023? Considering mortgage interest rates are unpredictable, as has been the housing market in its entirety the past year or so, waiting for rates to come down may not be the play. Waiting it out may actually lead to locking in at a higher rate as what some are waiting for may not come. Remember, historically speaking mortgage interest rates are still good… They’re just different now than what we have been used to.
The best move for you in 2023 will heavily depend on your unique financial and life circumstances. You should focus less on timing the market, and more on timing when it’s right for you personally. What will come in 2023 is unclear, but whatever it may be, Cambria Mortgage is here to guide you through it. 952-942-0110 / CambriaMortgage.com/Connect.