Some Facts that Buyers Should Know Heading Into 2023

By
Real Estate Agent with Keller Williams Capital Properties DC AB15253

The past few months brought about a turnaround in the housing market, with higher mortgage rates halting home sales since the summer. For homebuyers, the road ahead creates anxiety and uncertainty. But the outlook for the coming year may offer some reprieve and new opportunities according to the Close. 

Here are some facts that Buyers should keep in mind as they get ready to head into the home search in 2023.

INVENTORY

1. In today’s market, homebuyers searched an average of 10 weeks for a home. That’s an increase from eight weeks during 2020 and 2021, an indication that the market is cooling slightly, giving homebuyers a better shot at getting into a home they love.

2. As of October 2022, active inventory continued to grow, increasing 36% above one year ago, a clear indication that homes are staying on the market longer.

3. April is the most competitive month of the year for homebuyers. According to Realtor.com, there is a 29% surge of listings during April, and homes typically sell for higher during that month, as well.

4. According to a Realtor.com seller survey, 67% of homeowners who sold in August 2022 negotiated with buyers who wanted repairs done (in comparison with 31% in the previous six to 12 months).

5. A record 29% of single-family homes for sale in the third quarter were newly constructed, climbing from 25% in the same period last year and 18% in 2020.

6. In September 2022, the number of completed new homes for sale was up 19% from the prior month.

7. A strong rebound is projected for housing in 2024, with a 10% jump in home sales and a 5% increase in the national median home price.

 

HOME PRICES

1. In 2022, homebuyers typically purchased their homes for 100% of the asking price, with 28% purchasing for more than the asking price. 

2. The median home price in 2022 is $357,300. That’s a $46,700 increase from January 2021 to January 2022 but it is changing.

3. As of August, the Case-Shiller Index showed U.S. home prices had fallen 1.3% from their June 2022 peak.

4. Researchers at Goldman Sachs expect U.S. home prices to decline between 5% and 10%, with their official forecast model predicting a 7.6% drop.

5. Ohio is the most affordable state based on the cost of living and housing affordability. Oklahoma comes in second-most affordable, while the least affordable states are Oregon, Alaska, Massachusetts, California, and Hawaii.

 

MORTGAGE RATES

1. Mortgage rates are expected to keep rising, albeit slowly, after new indicators showed that inflation rose 7.7% year-over-year in October, according to a Bureau of Labor Statistics report.

2. Median monthly mortgage payments are now about 81% higher than they were a year ago, according to a Realtor.com® analysis.

3. For potential buyers, the increase in mortgage rates to 7%-plus means the monthly payment on a median-priced home, with a 20% down payment, is now close to $1,000 higher than in January 2022.

4. Among homebuyers aged 23 to 41, the most common reason for a mortgage denial was an insufficient debt-to-income (DTI) ratio, followed by a low credit score.

DOWNPAYMENTS

1. Twenty-nine percent of first-time homebuyers cite “saving for a down payment” as the most challenging part of the homebuying process.

2. Since 2018, the average down payment for first-time homebuyers has consistently ranged between 6% and 7 percent.

3. In 2021, 28% of first-time homebuyers used a gift or loan from family or friends toward their down payment.

If you have questions about the real estate market in Bethesda, DC, or the greater DC Metro area, just give us a call at 240-401-5577 or email us at lise@lisehowe.com.  The Lise Howe Group is here to answer all your real estate questions! 

 

Comments (14)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great recap, Lise... fortunately, the numbers in Charlotte are somewhat more "positive" than the ones in your report. (Well, at least for now.)

Dec 07, 2022 05:50 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Lise,
What a great recap of the changes that have taken place over the last year in your market. The good news is, if prices are adjusting down a bit that helps offset some of the interest rate hikes.

Dec 07, 2022 06:11 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Carol Williams - you are so right - Buyers only have so much money - so if interest rates go up, prices must come down....

Dec 07, 2022 06:22 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Nina Hollander, Broker - hopefully Charlotte will be a shining beacon for us all

Dec 07, 2022 06:22 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Lise,

i appreciate your recap of the changes that have taken place over the last year in your market. Well done....if prices adjust down a bit (and i see them more stabilizing than rising) that helps offset some of the interest rate hikes.

Dec 07, 2022 06:41 AM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Lise, these are a lot of very interesting and worth while facts.  Thank you.  While I am aware of the April surge, I am surprised by the actual number.  mdm

Dec 07, 2022 08:28 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Your market seems to parallel our area for time on market and slightly better prices. Once we get into January it will be much clearer for buyers

Dec 07, 2022 01:40 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lise, excellent information for buyers to know and understand if they plan to purchase in 2023.

 

Dec 07, 2022 01:49 PM
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

These are good facts to know and the Bethesda Condo Queen is always on top of what is going on in her market!

Dec 08, 2022 07:26 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Lise Howe and Love the blog and can I reach blog it in a couple of weeks?  Make it a great day!

 

Dec 08, 2022 09:58 AM
John Meussner
Mortgages in AZ, CA, CO, DE, FL, GA, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA
#MortgageMadeEasy Fair Oaks, CA 484-680-4852

Great info, Lise!!  I expect 2023 will be a more "normal" market in terms of inventory, DOM, etc.  The outliers of 2020 and 2021 will fade some.  I do think mortgage rates will come down, helping more buyers enter the market with more affordable payments than those available this year - we shall see! : )

Dec 08, 2022 10:11 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Great recap of the market changes in your area, Lise. Anyone seeking further guidance around what this means for their purchase or sale should be in touch with you.

Jeff

Dec 08, 2022 03:01 PM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Lise Howe - those are great discussion points to discuss with buyers on the fence with jitters. I really liked John Meussner's comment. His expertise is mortgages and he recently had an article he shared about about mortgages that was excellent!

Lise, with your expertise and understanding of the market, buyers will have the self-confidence to proceed. 

Dec 09, 2022 07:22 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lise, you have listed many facts buyers need to know if they are contemplating a home purchase in the coming year.

Dec 17, 2022 07:26 AM