Experts predict more ups and downs for the 2023 Housing Market. One of the biggest challenges buyers face is high mortgage rates. The Federal Reserve raised rates to nearly seven percent to help slow inflation.
Over the past year, you see mortgage rates have gone up dramatically, and that has priced many buyers out of the market.”
Dennis Shea, J. Ronald Terwilliger Center for Housing Policy
The move slowed a once hot buyers’ market. However, the price of gas, food, and other essential goods remains high. The Hill spoke with Dennis Shea of the J. Ronald Tertwilliger Center for Housing Policy, who says, “…between a 3 percent interest rate and a 7 percent interest rate is a significant chunk of change you have to pay out, even when the housing prices go down.”
Moreover, The Federal Reserve indicates interest rate hikes will scale back in 2023. Mortgage rates are predicted to drop around 5.2 percent by the end of the year. Still, experts like Shea say housing affordability will remain a “major, major problem.”
Rental Prices in 2023
43 Million Americans are renters right now, which is the highest number in more than fifty years. Renters battled through pandemic price hikes and now inflation. The New York Times reports that the price of rent rose nearly 5 percent between January and November 2022. However, there may be relief for those looking to rent instead of buying property. Unlike the stagnant prices in the buyers’ market, prices in the rental market have been falling for months. Nationwide, the average cost of rent is $1,356 a month. In 2023, Real Estate experts say renters will have more options and less competition.
“Renters have been squeezed to their limits.”
Kenny Lee, StreetEasy Economist
Experts predict 2023 will also bring a “building boom” in rental units across America. Construction is underway on more than 930,000 units across the country right now, the most since 1973. More units and less competition are expected to keep the price of rent going down for now. However, affordability will remain an issue for renters in these tumultuous economic times as well. Navigate Affordable Housing Partners is committed to advancing housing choice. Click here to learn more about affordable rental options and housing choice vouchers in your area.