Homebuyers looking for a reprieve from sky-high prices may be disappointed next year.
Realtor.com's 2023 Housing Forecast predicts that as the housing market begins a "gradual adjustment" the firm says could last through 2025, "what next year will offer buyers is less competition for a growing number of for-sale homes." Buyers and sellers can expect average mortgage rates of 7.4% next year, with early 2023 hikes followed by a slight retreat to 7.1% by year-end, while home price growth will moderate to a single-digit yearly pace of 5.4% for the first time since 2020.
Rents are still expected to outpace home prices, accelerating 6.3% year over year, and Realtor.com says they'll probably hit new highs, further constraining first-time buyers' budgets. Incomes are expected to grow by just shy of 4% in 2023, but analysts say that isn't enough to offset higher mortgage rates and home prices.
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