What to Expect in Buying a Home
Expect the housing market in 2023 to look different from the highly competitive housing market of the past two years. Some predictions include a gradual drop in home prices, high-interest rates, and a switch to a buyer’s market.
Buying a home is a significant financial commitment, regardless of the market conditions. But after a record-setting rise in home prices in 2021 and 2022, and mortgage interest rates rising to the highest mark in two decades, there are a few things for prospective homebuyers to keep in mind for 2023.
While the housing market can vary significantly based on location, it can be helpful to know about general expectations to consider as you prepare to hunt for a home.
Consult With a Professional for Your Local Market
Predictions for the 2023 housing market are just that, and while economists and analysts tend to focus more on nationwide trends, local real estate agents and other professionals have a finger on the pulse of current trends in your area.
As a result, if you’re thinking about moving in the coming year, don’t hesitate to reach out to experts where you live or plan to move. They can help you get a better idea of what to expect and how to maximize your savings on a new home.
Now is also a good time to start preparing your credit history for a home purchase. Review your credit score and credit report to evaluate your credit health and, if necessary, take steps to improve your credit before you start the mortgage process.
This process can take time, though, so keep an eye on mortgage rates to find a good balance between the variables you can control and the ones you can’t.
Demand May Remain Strong, But Cracks Are Starting to Form
Wells Fargo’s economists expect that buyer demand will remain strong in 2023, but note that it’s largely driven by younger homebuyers who are more sensitive to interest rate increases and more susceptible to job loss during recessions.
However, more than half of the economists and housing experts polled in a recent Zillow Home Price Expectations Survey expect that high mortgage rates will impact demand enough to reduce competition between homebuyers in 2023, giving buyers more leverage than sellers.
If you experience a buyer’s market, work with an experienced real estate agent to negotiate the sales price and concessions to maximize your savings.
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