Your family is getting larger, and remaining in your current home is no longer an option. 2022 brought a challenging buyer’s market, and rates are still at their highest since 2002. Will 2023 be a better year to purchase a home?
The bad news is that Fannie Mae’s November 2022 housing forecast shows the interest rates will remain in the 7.0% range for the first part of the year but drop slightly to 6.5% by the year’s end. The good news is that some experts, like Goldman Sachs, show that home prices may drop as much as 10% in 2023. And as far as inventory, according to Reatlor.com, homes available for sale were up 55% versus last year in December. The bottom line is if you need to purchase in 2023, you can expect rates to stay in the 6.9% range, inventory to be better, competition to be less, and home prices to drop a little.
If you proceed with purchasing a home in 2023, here are a few suggestions to consider:
Look at the first part of the year. Buying in the Spring and Summer is when most homes are bought and sold, creating a competitive market and high prices. Starting your search earlier in the year may net better results.
Take advantage of seller concessions. Since competition for home purchases is likely to be less in 2023, borrowers should investigate seller concessions. A seller concession is an amount the seller agrees to pay toward closing costs on the buyer’s behalf, including property taxes, loan origination fees, or inspection fees. Another seller concession is a 2-1 buydown, which is a mortgage agreement between the lender and borrower that provides a lower mortgage rate than is currently offered for the first year of the loan, then a somewhat higher rate the second year, and then the full rate for the third year and beyond. The seller pays for the buydown to allow for the lower rates.
Work with a professional, full-time realtor. The right realtor can make all the difference when purchasing in a challenging market. They have access to thousands of listings on the multiple listing service (MLS) and hear about listings from other agents before they hit the MLS. And they will have the experience to negotiate in your favor.
It’s hard to predict how the economy and the housing market will progress in 2023, but staying informed and getting an early start is advantageous. If you have home purchase questions, talk to the experts at NASB at 855-465-0753 or click here for more information.
