The 2023 Winter Housing Market Update
- Kindred Homes
- December, 11, 2023
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The 2023 Winter Real Estate Market: Trends and Outlook
The past two years have been quite a rollercoaster ride for the real estate market. With the pandemic affecting every aspect of our lives, we saw the massive economic stimulus as a result of the COVID-19 pandemic which led to the massive spike in inflation and commensurate interest rate hike over the last year. However, as we begin to close 2023, things are looking up for buyers in the winter real estate market moving into 2024.
Inflation, interest rates, and inventory are three key factors that have a significant impact on the real estate market. In this blog post, we will take a closer look at these trends and see how they are shaping the current state of the winter real estate market.
Inflation: A Slowing Down Trend
One of the major concerns for buyers in any housing market is inflation. With the rising cost of living, buyers are always worried about whether they will be able to afford a home in their desired area. With rising interest rates in the past year and a half, the FED has been able to successfully curb inflation from the 6.5% - 7% that we had seen in the past few years down to a projected 3.25% by the end of 2023.
However, there is good news for buyers in the 2023 winter real estate market. Inflation has slowed down considerably over the past year. This means that prices for homes are not expected to increase drastically, making it a more affordable time for buyers to enter the market.
Interest Rates: Falling Quickly
Another important factor that affects the real estate market is interest rates. In recent years, we have seen interest rates rising drastically from a historic low of around 2% around the start of 2022 to a 20-year high 8% that we saw in mid-October 2023, making it more difficult for buyers to secure a loan and afford their dream home.
But again, there is positive news for buyers in this current market. Interest rates are falling quickly from their 20-year high in mid-October, making it a more favorable time for buyers to enter the market and secure a loan at a lower interest rate. Per Fannie Mae, current interest rates have now plummeted to somewhere between 6% and 6.5%, a considerable drop from a few short weeks prior.
Inventory: Homes Sitting on the Market Longer
With inflation slowing down and interest rates falling, one would expect homes to be snatched up quickly in this current winter real estate market. However, that is not the case as inventory levels remain high.
Homes are sitting on the market for a longer time, giving buyers more options to secure the home of their dreams. This is good news for buyers as they have more time to make informed decisions and potentially secure a better deal.
Buyer Outlook: Optimistic Signs
With inflation slowing down, interest rates falling quickly, and inventory levels high, it's no surprise that buyers are feeling optimistic about the 2023 winter real estate market. These trends are creating a more favorable environment for buyers, allowing them to enter the market with confidence and potentially secure their dream home at a better price and long term rate. For more information, read our blog post on why now is a perfect time to buy your dream home.
In conclusion, while the past two years have been challenging for the real estate market, it's clear that things are looking up for buyers in the 2023 winter real estate market. With trends such as slowing inflation, falling interest rates, and higher inventory levels, buyers have every reason to be optimistic about the future of the housing market. So if you're in the market for a new home this winter, now is the time to take advantage of these favorable conditions and make your homeownership dream a reality.