Housing Market Trends to Expect in the Summer Months

2023 has a lock to keep track of, and summer will be no exception. Here’s a few trends to watch.

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Prices

The first of my 2023 real estate market predictions is that home prices will continue to increase during 2023. However, the rate of year-over-year appreciation will be lower. I predict Indiana home prices as a whole to increase 3% to 6% in 2023 compared to 2021. The main reason for this reduction will be rising interest rates and inflationary pressure. Larger homes with many amenities may see a downturn in value.

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Sellers Work Harder

In order to sell a home for top dollar in 2023, those wishing to sell their homes are going to have to invest in marketing their homes. In the white-hot market of 2021, sellers had it easy. During that time, she said, sellers sold their homes above asking price without putting much effort into the properties. Many would not update their home, knowing that multiple offers would come in as many buyers were eager to move.

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Building

Another of the real estate market trends we will see in 2023 is an overall increase in the number of new homes for sale. U.S. housing starts will increase a lot during 2023. Builders are finally seeing an opportunity to start building. Additionally, many of the supply chain bottlenecks which plagued the industry in 2021 will be cleared up in 2023. Home builders want to take advantage of the opportunity in front of them and will start to build more homes.

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Rates

Continued inflation, overall higher interest rates, a potential recession, and geopolitical tensions will force 30-year and 15-year mortgage rates up throughout 2023 and will bring the two rates closer together as short-term risks rise. The 30-year and 15-year benchmark mortgage loans averaging 8.75 percent and 8.25 percent, respectively, across 2023.

Supply

Before the housing crash of 2008, inventory peaked at about a 13-month supply – twice what we would see in a healthy market. Today, we have about a three-month supply, which is about half of what we need. Current homeowners are unlikely to trade in their 3 percent mortgage for a new home with a 7 percent loan unless they absolutely have to, so existing home inventory should remain low.

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Call Lesa Miller at (812) 360-3863 or go online where you can read her posts on other social media accounts and websites.