2023 Housing Market Forecast [INFOGRAPHIC]

 

Some Highlights

• From home sales to prices, the 2023 housing market will be defined by mortgage rates. And where rates go depends on what happens with inflation.
• If you’re thinking of buying or selling a home this year, let’s connect so you understand where the housing market is headed in 2023.

What Every Seller Should Know About Home Prices

 

If you’re trying to decide whether or not to sell your house, recent headlines about home prices may be top of mind. And if those stories have you wondering what that means for your home’s value, here’s what you really need to know.

What’s Really Happening with Home Prices?

It’s possible you’ve seen news stories mentioning a drop in home values or home price depreciation, but it’s important to remember those headlines are designed to make a big impression in just a few words. But what headlines aren’t always great at is painting the full picture.

While home prices are down slightly month-over-month in some markets, it’s also true that home values are up nationally on a year-over-year basis. The graph below uses the latest data from S&P Case-Shiller to help tell the story of what’s actually happening in the housing market today:

As the graph shows, it’s true home price growth has moderated in recent months (shown in green) as buyer demand has pulled back in response to higher mortgage rates. This is what the headlines are drawing attention to today.

But what’s important to notice is the bigger, longer-term picture. While home price growth is moderating month-over-month, the percent of appreciation year-over-year is still well above the home price change we saw during more normal years in the market.

The bars for January 2019 through mid-2020 show home price appreciation around 3-4% a year was more typical (see bars for January 2019 through mid-2020). But even the latest data for this year shows prices have still climbed by roughly 10% over last year.

What Does This Mean for Your Home’s Equity?

While you may not be able to capitalize on the 20% appreciation we saw in early 2022, in most markets your home’s value, on average, is up 10% over last year – and a 10% gain is still dramatic compared to a more normal level of appreciation (3-4%).

The big takeaway? Don’t let the headlines get in the way of your plans to sell. Over the past two years alone, you’ve likely gained a substantial amount of equity in your home as home prices climbed. Even though home price moderation will vary by market moving forward, you can still use the boost your equity got to help power your move.

As Mark Fleming, Chief Economist at First American, says:

“Potential home sellers gained significant amounts of equity over the pandemic, so even as affordability-constrained buyer demand spurs price declines in some markets, potential sellers are unlikely to lose all that they have gained.”

Bottom Line

If you have questions about home prices or how much equity you have in your current home, let’s connect so you have an expert’s advice.

Your House Could Be the #1 Item on a Homebuyer’s Wish List During the Holidays

 

Each year, homeowners planning to make a move are faced with a decision: sell their house during the holidays or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market.

The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house.

1. While the supply of homes for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), explains:

“There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.”

2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, explains:

“While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.”

3. The desire to own a home doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy.

4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year.

5. Rents have skyrocketed in recent years. And, many buyers are looking to escape rising rents and avoid falling into the rental trap for another year. As an article from Zillow says:

“Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values.”

Your home could be their ticket to leaving renting behind for good.

Bottom Line

There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.

VA Loans: Making Homes for the Brave Achievable [INFOGRAPHIC]

 

Some Highlights

• VA Loans can help make homeownership possible for those who have served our country.
• These loans offer great benefits for eligible individuals and can help them buy a VA-approved house or condo, build a new home, or make improvements to their house.
• Homeownership is the American Dream. One way we can honor and thank our veteransis to ensure they have the best information about the benefits of VA home loans.

What Happens to Housing when There’s a Recession?

 

Since the 2008 housing bubble burst, the word recession strikes a stronger emotional chord than it ever did before. And while there’s some debate around whether we’re officially in a recession right now, the good news is experts say a recession today would likely be mild and the economy would rebound quickly. As the 2022 CEO Outlook from KPMG says:

“Global CEOs see a ‘mild and short’ recession, yet optimistic about global economy over 3-year horizon . . . 

 More than 8 out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be mild and short.”

To add to that sentiment, housing is typically one of the first sectors to rebound during a slowdown. As Ali Wolf, Chief Economist at Zonda, explains:

“Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound.”

Part of that rebound is tied to what has historically happened to mortgage rates during recessions. Here’s a look back at rates during previous economic slowdowns to help put your mind at ease.

Mortgage Rates Typically Fall During Recessions

Historical data helps paint the picture of how a recession could impact the cost of financing a home. Looking at recessions in this country going all the way back to 1980, the graph below shows each time the economy slowed down mortgage rates decreased.

Fortune explains mortgage rates typically fall during an economic slowdown:

“Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”

While history doesn’t always repeat itself, we can learn from and find comfort in the trends of what’s happened in the past. If you’re thinking about buying or selling a home, you can make the best decision by working with a trusted real estate professional. That way you have expert advice on what a recession could mean for the housing market.

Bottom Line

History shows you don’t need to fear the word recession when it comes to the housing market. If you have questions about what’s happening today, let’s connect so you have expert advice and insights you can trust.

3 Questions You May Be Asking About Selling Your House Today [INFOGRAPHIC]

 

Some Highlights

• If you’re planning to sell your house this year, you likely have questions about what the shift in the housing market means for your home sale.
• You might be wondering: Should I wait to sell? Are buyers still out there? And can I afford to buy my next home?
• Let’s connect so you can get answers to these questions and learn about the opportunities you still have in today’s housing market.

The Emotional and Non-financial Benefits of Homeownership

 

With higher mortgage rates, you might be wondering if now’s the best time to buy a home. While the financial aspects are important to consider, there are also powerful non-financial reasons it may make sense to make a move. Here are just a few of the benefits that come with homeownership.

Homeowners Can Make Their Home Truly Their Own

Owning your home gives you a significant sense of accomplishment because it’s a space you can customize to your heart’s desire. That can bring you added happiness.

In fact, a report from the National Association of Realtors (NAR) shows making updates or remodeling your home can help you feel more at ease and comfortable in your living space. NAR measures this with a Joy Score that indicates how much happiness specific home upgrades bring. According to NAR:

“There were numerous interior projects that received a perfect Joy Score of 10: paint entire interior of home, paint one room of home, add a new home office, hardwood flooring refinish, new wood flooring, closet renovation, insulation upgrade, and attic conversion to living area.”

And as a homeowner, unless there are specific homeowner’s association requirements, you typically won’t have to worry about the changes you can and can’t make.

If you rent, you may not have the same freedom. And if you do make changes as a renter, there’s a good chance you’ll need to revert them back at the end of your lease based on your rental agreement. That can add additional costs when you move out.

The Responsibilities of Homeownership Give You a Greater Sense of Achievement

There’s no denying taking care of your home is a large responsibility, but it’s one you’ll take pride in as a homeowner. Freddie Mac explains:

“As the homeowner, you have the freedom to adopt a pet, paint the walls any color you choose, renovate your kitchen, and more. . . . Of course, along with the freedoms of homeownership come responsibilities, such as making your monthly mortgage payments on time and maintaining your home. But as the property owner, you’ll be caring for your own investment.”

You’re not taking care of a living space that belongs to someone else. The space is yours. As an added benefit, you may get a return on investment for any upgrades or repairs you make.

Homeownership Can Lead to Greater Community Engagement

That sense of ownership and your feelings of responsibility can even extend beyond the walls of your home. Your home also gives you a stake in your community. Because the average homeowner stays in their home for longer than just a few years, that can lead to having a stronger connection to your local area. NAR notes how that can benefit you:

“Living in one place for a longer amount of time creates an obvious sense of community pride, which may lead to more investment in said community.”

If you’re looking to put down roots, homeownership can help fuel a sense of connection to the area and those around you.

Bottom Line

If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey, including the ability to customize your home, the sense of achievement homeownership brings, and a greater connection to your community. Let’s connect to discuss everything homeownership has to offer.