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2023 Housing Forecast
Core inflation is currently at 5.96%. The Federal Reserve’s core inflation goal is 2%, so they have a long way to go. The high-interest rate environment has been shaking the financial markets. The Fed's persistent policies will eventually instigate an economic recession in 2023 that will most likely begin by mid-year. As a result, the local housing market is going to be subdued in 2023, especially in the first half of the year.
Here is the forecast:
- 2023 will continue where housing in 2022 left off, sluggish.
- Housing is very interest rate sensitive, where even with low inventory levels, values will still drop a bit (not crash!) due to affordability challenges.
- Values will stop retreating when mortgage rates approach or dip below 5.5%, instigating more demand and more homeowners to list their homes.
- The housing market is no longer insane, homes are for the most part not selling above their asking price, not selling immediately, not selling with multiple offers, and there is far less activity and buyer competition.
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