The housing market is sending clearer signals that historically low mortgage rates and the home-buying frenzy have come to an end. As we near the end of 2022, here’s a look at the expectations of real estate experts for 2023.
Jamison Manwaring, CEO and co-founder of Neighborhood Ventures: 2023 will be the first normal year for housing since 2019. After big run ups in housing costs in 2020 and 2021 followed by 4% increase in interest rates to slow the market in 2022, 2023 is set up to be a more normal year as interest rates stabilize and more newly constructed housing units are added. The supply of new units will be offset by the number of homeowners not moving because their interest rate is much lower than a new loan.
New home and multifamily construction projects slated for delivery in 2024 and 2025 will be delayed because the run-up in interest rates have made these ventures less profitable. Housing costs will remain flat and may even decline in some Sun Belt markets. Additional supply of new construction multifamily units will be delivered throughout 2023, mostly in Sun Belt states helping to ease housing costs. These high growth areas have suffered from housing shortages and new supply has been slow due to materials and labor shortages and Covid-related delays. But many of these projects will be delivered during 2023 adding thousands of additional units.