January 4, 2023

2023 Real Estate Market Outlook (And What It Means for You)

Last year, one factor drove the real estate market more than any other: rising mortgage rates.

 

In March 2022, the Federal Reserve began a series of interest rate hikes in an effort to pump the brakes on inflation.1 And while some market sectors have been slow to respond, the housing market has reacted accordingly.

 

Both demand and price appreciation have tapered, as the primary challenge for homebuyers has shifted from availability to affordability. And although this higher-mortgage rate environment has been a painful adjustment for many buyers and sellers, it should ultimately lead to a more stable and balanced real estate market.

 

So what can we expect in 2023? Will mortgage rates continue to climb? Could home prices come crashing down? While this is one of the more challenging real estate periods to forecast, here’s what several industry experts predict will happen to the U.S. housing market in the coming year.

 

 

MORTGAGE RATES WILL FLUCTUATE LESS

 

In 2022, 30-year fixed mortgage rates surged from roughly 3% in January to around 7%. According to Rick Sharga of real estate data company ATTOM, “We’ve never seen rates double in so short a period.”2

 

This year, economists forecast a less dramatic shift.

 

In an interview with Bankrate, Nadia Evangelou, senior economist for the National Association of Realtors, shares her vision of three possible mortgage rate scenarios:3

 

  1. Inflation continues to surge, forcing the Fed to repeatedly raise interest rates. In that scenario, she predicts that rates could reach as high as 8.5%.
  2. Inflation decelerates and mortgage rates follow suit, averaging 7 to 7.5% for the year.
  3. Rising interest rates trigger a recession, which could ultimately lead mortgage rates to drop closer to 5% by the end of the year.

 

Realtor.com forecasts something similar to scenario #2 above: “Mortgage rates will average 7.4% in 2023, trickling down to 7.1% by year’s end.”4 The Mortgage Bankers Association, however, projects something closer to Evangelou’s scenario #3, with the 30-year fixed rate declining steadily throughout the year, averaging 6.2% in Q1 and 5.2% by Q4.5

 

Economists at Fannie Mae fall somewhere in the middle. In a recent press release, they predicted that the U.S. economy will experience a “modest recession” this year.6 But in their December Housing Forecast, they project that 30-year fixed mortgage rates will only fall by half a point from an average of 6.5% in Q1 to 6.0% in Q4.7

 

“From our perspective, the good news is that demographics remain favorable for housing, so the sector appears well-positioned to help lead the economy out of what we expect will be a brief recession,” said Fannie Mae Chief Economist Doug Duncan.6

 

What does it mean for you?  Even the experts can’t say for certain where mortgage rates are headed. Instead of trying to ”time the market,” focus instead on buying or selling a home when the time is right for you. There are a variety of mortgage options available that can make a home purchase more affordable, including adjustable rates, points, and buydowns—and keep in mind you can always refinance down the road. We’d be happy to refer you to a trusted mortgage professional who can outline your best options.

 

 

SALES VOLUME WILL FALL AND INVENTORY WILL RISE

 

It looks like the home-buying frenzy we experienced in recent years is behind us. While the desire to own a home remains strong, higher mortgage rates have made it unaffordable for a large segment of would-be buyers.

 

Many economists expect the number of home sales to continue to decline this year, leading to an increase in listing inventory and days-on-market, or the time it takes to sell a home. But, there is a wide range when it comes to specifics.

 

Economists at Fannie Mae forecast that total home sales will fall by around 20% this year before rising again by nearly 15% in 2024.7 National Association of Realtors Chief Economist Lawrence Yun projects a less extreme dip of 7% in 2023 with a rebound of 10% next year.8

 

Realtor.com Chief Economist Danielle Hale foresees something in between. “The deceleration in home sales is likely to continue as high home prices and mortgage rates limit the pool of eligible home buyers. We anticipate that existing home sales will decline another 14.1% in 2023.” She expects this drop in sales to lead to a nearly 23% increase in inventory levels this year, offering more choices for buyers who have struggled to find a home in the past.9

 

However, given the severe lack of housing supply, even with a double-digit increase, the market is expected to remain relatively tight and below pre-pandemic levels. Hale points out: “It’s important to keep historical context in mind. The level of inventory in 2023 is expected to fall roughly 15% short of the 2019 average.”9

 

What does it mean for you?  If you’ve been frustrated by a lack of inventory in the past, 2023 may bring new opportunities for you to find the perfect home. And today’s buyers have more negotiating power than they’ve had in years. Contact us to find out about current and future listings that meet your criteria.

 

If you’re hoping to sell, you may want to act fast; rising inventory levels will mean increased competition. We can help you chart the best course to maximize your profits, starting with a professional assessment of your home’s current market value. Reach out to schedule a free consultation.

 

 

HOME PRICES WILL REMAIN RELATIVELY STABLE

 

While some economists expect home prices to fall this year, many expect them to remain fairly stable. “For most parts of the country, home prices are holding steady since available inventory is extremely low,” said Yun at a November conference.8

 

Nationally, Yun expects the average median home price to tick up by 1% in 2023, with some markets experiencing greater appreciation and others experiencing declines.8 Economists at Fannie Mae offer a similar projection, forecasting a slight decrease in their Home Price Index of about 1.5%, year-over-year.7

 

Other experts foresee a larger fluctuation. Hale expects U.S. home prices to rise by 5.4% this year, while Morgan Stanley is forecasting a 7% drop from the peak in June 2022.9,10

 

Still, many economists agree that a housing market crash like the one we experienced in 2008 is highly unlikely. The factors that caused home prices to plunge during the Great Recession—specifically lax lending standards and a surplus of inventory—aren’t prevalent in our current market.10 Therefore, home values are expected to remain comparatively stable.

 

What does it mean for you? It can feel scary to buy a home when there’s uncertainty in the market. However, real estate is a long-term investment that has been shown to appreciate over time. And keep in mind that the best bargains are often found in a slower market, like the one we’re experiencing right now. Contact us to discuss your goals and budget. We can help you make an informed decision about the right time to buy.

 

And if you’re planning to sell this year, you’ll want to chart your path carefully to maximize your profits. Contact us for recommendations and to find out what your home could sell for in today’s market.

 

 

RENT PRICES WILL CONTINUE TO CLIMB

 

Affordability challenges for would-be buyers, inflationary pressures, and an overall lack of housing could continue to drive “above-average” rent price increases in much of the country.11 The Federal Reserve Bank of Dallas expects year-over-year rental price growth to tick up to 8.4% in May before moderating later in the year.12

 

According to Hale, “U.S. renters will continue to face challenges from limited supply and excess demand in the coming year that will keep upward pressure on rent growth. At a national level, we forecast rent growth of 6.3% in the next 12 months, somewhat ahead of home price growth and historical rent trends.”9

 

However, there are signs that the surge in rent prices could be tapering. According to Jay Parsons, head of economics for rental housing software company RealPage, there’s some evidence of a slowdown in demand. He predicts that market-rate rents will rise just 3.3% this year. Still, analysts agree that a return to lower pre-pandemic rental prices is unlikely.10

 

What does it mean for you?  Rent prices are expected to keep climbing. But you can lock in a set mortgage payment and build long-term wealth by putting that money toward a home purchase instead. Reach out for a free consultation to discuss your options.

 

And if you’ve ever thought about purchasing a rental property, now may be a perfect time. Call today to get your investment property search started.

 

 

WE’RE HERE TO GUIDE YOU

 

While national real estate forecasts can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and drive home values in your particular neighborhood.

 

If you’re considering buying or selling a home in 2023, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

 

 

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

 

Sources:

  1. Forbes -
    https://www.forbes.com/advisor/investing/fed-funds-rate-history/
  2. Bankrate -
    https://www.bankrate.com/mortgages/will-mortgage-rates-go-up-in-december-2022/
  3. Bankrate -
    https://www.bankrate.com/real-estate/housing-market-predictions-2023/
  4. Realtor.com -
    https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/
  5. Mortgage Bankers Association -
    https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/mortgage-finance-forecast-dec-2022.pdf?sfvrsn=b584bf7_1
  6. Fannie Mae -
    https://www.fanniemae.com/newsroom/fannie-mae-news/economy-still-expected-enter-and-exit-modest-recession-2023
  7. Fannie Mae -
    https://www.fanniemae.com/media/45801/display
  8. National Association of Realtors -
    https://www.nar.realtor/newsroom/nars-lawrence-yun-predicts-us-home-prices-wont-experience-major-decline-could-possibly-rise-slightly
  9. Realtor.com -
    https://www.realtor.com/research/2023-national-housing-forecast/
  10. The New York Times -
    https://www.nytimes.com/2022/11/04/realestate/housing-market-interest-rates.html
  11. CNBC -
    https://www.cnbc.com/2022/09/28/how-much-higher-rent-will-go-in-2023-according-to-experts.html
  12. Federal Reserve Bank of Dallas -
    https://www.dallasfed.org/research/economics/2022/0816

 

Ready to Buy or Sell a Home? Here Are 5 Key Factors in Choosing the Right Agent

June 2, 2025
Navigating the real estate market without guidance is like starting an expedition without a map. Whether you're selling your cherished family home or searching for your dream property, having the right real estate agent by your side can make all the difference. According to a 2024 report from the National Association of Realtors, agent-represented homes sold for a median price of $435,000, compared to just $380,000 for those sold by owners alone. 1

Selling Your Home In 2025? Here's What Buyers Want (And How To Deliver)

May 5, 2025
Thinking about listing your home in 2025? If so, you're smart to start planning ahead. With housing inventory rising in many market segments, today’s sellers need more than just a “for sale” sign to stand out. 1 The good news? You can still make a strong impression and command top dollar—if you know what today’s buyers are really looking for. We’ve outlined six of the top homebuyer priorities in 2025, along with a clear action plan to help you position your property for success. Whether you're weeks or months away from listing, these insights will help you attract serious offers and maximize your return. BUYER PRIORITY #1: Move-In-Ready Condition Buyers want homes that are ready to enjoy from day one. In fact, a recent survey found that 94% of buyers said it was either “very important” or “somewhat important” to buy a home that’s move-in ready. 2 Properties that feel fresh and well-maintained are far more likely to attract competitive offers. Seller Action Plan: Refresh your interior. This might include painting rooms in neutral, contemporary colors and swapping outdated fixtures for more modern alternatives. We may also recommend that you take down heavy drapery or dated blinds to brighten your space and clean or replace flooring to create a clean and cohesive look. Fix anything that’s broken. If something isn’t working quite right, repair it now. Provide maintenance records, if you have them, and consider a pre-listing inspection to identify potential issues early—helping avoid delays or negotiations later. We can advise you on the best course of action given your circumstances and your home’s condition. Strategically enhance kitchens and bathrooms. Modern kitchens and bathrooms are a major selling point for many buyers. 3 While you don’t necessarily need a full remodel, smaller updates—like replacing kitchen appliances or retiling a bathroom shower—can make a big difference. At a minimum, ensure all surfaces–-including cabinets, countertops, and floors—are clean and in good condition, and address any grout issues or needed repairs. Our team can help you identify and prioritize strategic improvements that will maximize your home's appeal and market value. Contact us for a free evaluation! BUYER PRIORITY #2: Flexible Closing Timelines Many of today’s buyers are juggling complicated schedules and circumstances, especially if they need to time the sale of their current home with the purchase of their new one. If you are able to offer a flexible closing timeline, it can deliver an advantage. Seller Action Plan: Define your ideal timeline and explore your level of flexibility. We can discuss your goals and expectations for a closing timeline and consider how much flexibility you might be able to offer buyers. This will depend on your specific circumstances, but additional leeway can be helpful Make a plan to get out of your home quickly if needed. Some buyers need to move out of their current home quickly or relocate by a certain date to start school or a new job. Therefore, they may require an accelerated closing timeline. These buyers will be particularly interested in finding sellers who are willing and able to accommodate a fast closing. Worried about finding a new home if yours sells quickly? We can help you assess your options. 4 Leverage your real estate agent’s negotiation expertise. Closing dates can be tricky to navigate. As experienced professionals, we can help you work through the details to arrive at a mutually beneficial arrangement for you and the buyer. Trying to figure out a plan for your move? Schedule a free consultation to discuss your specific selling timeline and explore flexible closing options. BUYER PRIORITY #3: Assistance & Incentives The high cost of purchasing a home leaves many homebuyers financially tapped out. Offering strategic assistance and incentives can make your property stand out and attract a larger pool of potential purchasers. That’s why, in a recent survey of real estate agents, the majority recommended offering some type of homebuyer incentive. 5 Seller Action Plan: Consider closing cost assistance. Closing costs remain a significant barrier for many homebuyers, especially first-timers or those with limited savings. You might cover some of these expenses—such as mortgage fees or the buyer’s agent commission—using proceeds from the sale 6 . This type of assistance can make a big difference in helping buyers afford your home. Evaluate the value of a mortgage rate buydown. Another option popular with buyers is a temporary or permanent mortgage rate buydown. 7 This means that you pay a lump sum upfront to reduce their mortgage rate (and their monthly payments), making a home purchase significantly more affordable for buyers. Offer an improvement allowance or home warranty. For homebuyers who are already stretched financially, the cost of home improvements and repairs can be a big concern. One way to alleviate those concerns is to offer a home improvement allowance. For example, you could offer to pay a set amount toward new kitchen appliances or to replace worn carpeting. Another solution is to offer buyers a one-year home warranty from a reputable provider. The most effective incentive strategies will depend on your specific property and its target buyers. Our team can help you identify creative and impactful options tailored to your home. BUYER PRIORITY #4: Curb Appeal A well-maintained and visually appealing exterior, often referred to as "curb appeal," is essential for generating interest and bringing buyers in the door. In fact, 97% of Realtors say that curb appeal is important to buyers, and research indicates that properties with strong curb appeal tend to sell faster and for higher prices. 8 Seller Action Plan: Maintain an immaculate exterior. Ensure your landscaping is well-maintained while it’s on the market, with your lawn mowed, hedges trimmed, and flower beds weed-free. If this isn’t your strong suit, invest in a professional service. When it comes to your home itself, a welcoming entrance with a clean, freshly painted front door and updated hardware can make a big difference. Address visible exterior elements. Inspect and touch up any peeling or faded paint on the siding or trim, and repair or replace any damaged siding or roofing. Check that your walkways and driveway are in good condition and that your outdoor lighting is sufficient and in working order. Keep things clean. Thoroughly power wash the siding, walkways, driveway, and any other exterior surfaces to remove dirt, grime, and mildew. Clean all windows and screens, both inside and out, to maximize natural light and improve the overall appearance of your home. We’re happy to offer specific recommendations to enhance your property's curb appeal and to refer you to landscapers, painters, and other professionals for help. BUYER PRIORITY #5: Functional Spaces Today's buyers often prioritize properties that offer flexible and functional living spaces capable of adapting to their evolving needs, ranging from entertaining to remote work. 9 This includes the increasing importance of reliable, high-speed internet connectivity, which has become essential for work and school, smart home technology, and overall modern living. Seller Action Plan: Showcase versatile spaces to highlight their adaptability. Stage rooms to demonstrate their potential for various uses, such as a dedicated home office, a guest room that can also serve as a workout space, or a flexible living area that can accommodate a reading nook. Highlight storage and organization solutions. Functional living isn’t just about primary spaces—it’s also about smart storage. Showcase built-in shelving, closet systems, and other storage solutions that help keep the home organized and clutter-free. This gives buyers a sense of ease and livability. Keep connectivity in mind. Today’s buyers want high-tech capabilities without sacrificing style. 10 High-speed internet access has become increasingly important, and technology features—like home automation systems and built-in charging stations—offer seamless integration while preserving a clean, modern aesthetic. If your home features any coveted technology features, be sure to highlight them. Our team can help you stage your home to attract more potential buyers. Reach out for our recommendations! BUYER PRIORITY #6: Energy Efficiency & Sustainability With rising utility costs and a focus on environmental responsibility and clean living, buyers are looking for homes with eco-friendly features. 11 A few small changes can help you make the most of that desire and draw in conscious buyers. Seller Action Plan: Incorporate and highlight sustainable materials. Buyers are increasingly drawn to homes that feature eco-conscious design choices. If you’ve used sustainable materials—like bamboo flooring, recycled glass countertops, low-VOC paints, or reclaimed wood accents—make sure to highlight these details. They not only enhance your home’s aesthetic but also signal a thoughtful, environmentally responsible approach to design. Install energy-efficient features. While it isn’t always cost-effective to add these features solely to sell your home, if you plan on making any upgrades to windows, systems, or appliances, keep energy efficiency in mind. You may also want to consider upgrades like a smart thermostat that can both help cut utility bills and show potential buyers that your home is loaded with the latest technology. Take steps to reduce energy loss throughout the home. Simple upgrades like sealing gaps around doors and windows, adding weather stripping, or insulating the attic can significantly improve a home’s energy efficiency. 12 These improvements may seem small, but they can lower utility bills and demonstrate to buyers that the home has been well maintained with long-term savings in mind. We can help you identify the most impactful energy-efficient upgrades and highlight your home’s sustainable features to attract today’s eco-conscious buyers. Partnering for Success: Your Strategic Advantage in Today's Market Successfully selling your home in today’s competitive and ever-evolving market requires more than luck—it demands insight, preparation, and expert strategy. By aligning your listing with the priorities of today’s buyers, you’ll position your property to stand out and sell faster for top dollar. Our team is here to guide you every step of the way. From personalized recommendations and trusted vendor referrals to strategic pricing and marketing, we’re committed to helping you achieve a smooth and profitable sale. Ready to take the next step? Contact us today for a complimentary home value assessment and customized sales plan designed to make your property shine. Let’s work together to turn your real estate goals into reality! The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. Sources: 1. The Mortgage Report - https://themortgagereports.com/111334/monthly-for-sale-home-listings 2. Bright MLS - https://brightmls.com/article/what-will-homebuyers-want-in-2025 3. Homelight - https://www.homelight.com/blog/which-renovations-increase-home-value/ 4. Homelight - https://www.homelight.com/blog/buyer-how-to-buy-a-house-while-selling-your-own/ 5. Homelight - https://www.homelight.com/blog/real-estate-top-agent-insights-for-end-of-year-2024/ 6. Federal Housing Finance Authority - https://www.fhfa.gov/blog/insights/opening-new-doors-overcoming-obstacles-to-attain-affordable-homeownership 7. LendingTree - https://www.lendingtree.com/home/mortgage/buydown/ 8. National Association of Realtors - https://www.nar.realtor/research-and-statistics/research-reports/remodeling-impact-report-outdoor-features# 9. Yahoo - https://www.yahoo.com/lifestyle/home-trends-buyers-looking-2025-151535883.html 10. Apartment Therapy - https://www.apartmenttherapy.com/2025-house-style-trend-prediction-real-estate-37448456 11. National Association of Realtors - https://www.nar.realtor/magazine/real-estate-news/sales-marketing/13-features-new-home-buyers-say-are-essential-desirable 12. EnergyStar - https://www.energystar.gov/saveathome/seal_insulate/why-seal-and-insulate

5 ROADBLOCKS TO AFFORDABLE HOMEOWNERSHIP (AND WAYS TO MOVE PAST THEM)

April 4, 2025
Dreaming of a new home but feeling priced out? You’re not alone! According to a recent survey by Bankrate, 78% of aspiring homebuyers cite affordability issues as their primary deterrent. 1 According to data from the U.S. Census Bureau, home prices have risen around 32% since the pandemic, and elevated mortgage rates have caused monthly payments to balloon. 2
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