亚洲赌场

An abrupt spike in interest rates has hit the U.S. housing market like a blast of cold air. As a result, real estate activity feels especially sluggish heading into 2023 鈥� even for housing鈥檚 traditionally slow season.

Before the pandemic, the  for an existing home in the U.S. was $266,300. In June 2022, that figure had  due to the cheap cost of borrowing and broadening of work-from-anywhere jobs. Alongside housing, inflation in other sectors including food, transportation, and raw materials reached levels not seen in .

Having risen rapidly over the past few years, home prices cooled to around $380,000 by the end of 2022 since their summer peak. But , triggered by the Federal Reserve to help bring inflation under control, are offsetting the affordability gains buyers have made with declining home prices.

According to 亚洲赌场鈥檚 survey of over 1,000 top real estate agents nationwide, here are the trends that are likely to shape the housing market in 2023.

Buyers are seeing more favorable conditions when it comes to pricing and competition for homes as the market continues to rebalance. In Q2 2022, 95% of agents surveyed by 亚洲赌场 characterized their market as a seller鈥檚 market. In Q3, that number had declined to 51%, and in Q4 it fell further to just 30% of agents.

In Q4 2022, 23% of agents characterized their market as a buyer鈥檚 market, up from 10% in Q3. This is in sharp contrast to the market that prevailed from 2020 to mid-2022, when only 1%-2% of agents reported a buyer鈥檚 market.

For 2023, 45% of top agents surveyed are predicting a balanced market, while 34% predict a buyer鈥檚 market. Only 12% think they will see a seller鈥檚 market in the communities they serve. Because of the rapid shift in the market, 32% of agents surveyed say that sellers are now revisiting offers they had previously declined from buyers, up from 27% in Q3 2022.

The cooling of the seller鈥檚 market means buyers are no longer having to craft hyper-competitive offers in all cases. Buyers willing to accept higher interest rates (or pay cash) are taking advantage of their newfound leverage, our survey finds.

53% of agents say that an increasing number of buyers are pushing back on inspection items, up from 30% in Q2 2022. 77% of agents are reporting that contingencies are coming back, and that buyers are less likely to waive them. 51% of agents say that buyers are making fewer offers on homes, compared to 39% of agents reporting this in Q3 and 23% in Q2.

Buyers also generally have more houses to choose from. In Q4, 53% of agents said that inventory is increasing. Agents on average expect inventory to increase by 11% in the first six months of 2023.

3. Prices cool to reflect reduced demand

Since peaking in June 2022, the median price of existing homes has since depressed by 8%, to  in the fourth quarter. No one knows exactly where home prices will land in 2023, but agents we surveyed on average expect prices to decline by 7% in the first six months. The National Association of Realtors predicts prices to rise by 1% over the course of the year. However, a lot will depend on broader economic conditions and what happens with interest rates.

While the projected decline of home prices in 2023 may ease housing affordability overall, agents do not expect significant relief for buyers looking in the most affordable segments of the market. In fact, survey data shows that the more expensive a market is, the more likely that agents predict a buyer鈥檚 market for 2023. In the most affordable market segment (areas with the median home price under $250,000), only 25% of agents predict a buyer鈥檚 market. Meanwhile, areas with more luxury homes are seeing increases in inventory, alongside larger, move-up homes more generally. Remote workers, who have unique flexibility to respond to market shifts, are predicted to favor affordable areas when relocating in 2023.

The seller鈥檚 market of 2020-2022 was largely fueled by low mortgage interest rates. Homeowners with mortgages could also take advantage of these low rates by refinancing to save money. Homeowners with mortgages are now less likely to sell and risk losing a favorable rate, depressing inventory.

Nearly two-thirds (62%) of the agents surveyed agreed that would-be sellers would delay their plans to sell and opt to remain in their current homes. To adapt their current homes, 38% of agents predict that homeowners will use their equity to finance home upgrades; 24% predict that owners will build additions in order to avoid selling; and 17% predict that owners will convert rooms (such as a family room into a bedroom or a bedroom into a home office) to meet their needs.