As the world continues to battle the impacts of COVID-19, the housing market has been subject to radical shifts in supply and demand. With the majority of individuals accepting remote work as the new norm, there has been a steep shift towards suburban living. But what does the future hold for the housing market in 2023? Here are a few reasons why housing prices aren’t set to dip in 2023 and what measures you can take to make the most out of the situation.
1. Real-Estate Low Inventory
One of the primary reasons why housing prices are likely to remain high in 2023 is the low inventory of real estate available. As people move to the suburbs, the demand for housing increases, making the market tight. This lack of supply makes it hard to buy a home, and homeowners tend to appreciate their investments. In addition, the cost of building materials has gone up, making it more expensive to construct new homes or retrofit pre-existing ones. This rise in the cost of construction materials has contributed to staying the increase in demand for new housing.
2. High Demand for Housing
The increase in demand for housing, coupled with the low inventory of real estate, explains why there is such a high demand for housing. The demand means that home seekers often face stiff competition, resulting in a buying frenzy that raises the price of real estate. One cause of the heightened demand for housing is that market shifts have made it possible for more people to buy a new home or move from cities to suburban areas. The shift is a reflection of remote work, commuting, and lifestyle changes that the COVID-19 pandemic brought about.
3. Low Mortgage Rates
Mortgage rates are still relatively low, albeit higher than all-time lows. And as we all know, mortgage rates play a big role in the housing market. So, what can we do about it? While we may not have the power to control the market, we can control our own finances and make sure we’re being smart with our money. So, even though the market may not be on your side right now, taking advantage of the current lower mortgage rates could save you thousands in the long run. Who knows, maybe that dream home isn’t too far out of reach after all!
4. Home Building Industry
The home-building sector has faced challenges in recent years, resulting from factors such as the high cost of building materials and the shortage of human labor in the market. Even with the high demand for housing, the industry cannot deliver the quantity, causing a backlog that’s contributing to home values’ rise.
5. What You Can Do About It
With the housing market set to remain pricey for the foreseeable future, it might seem like a bleak outlook for first-time homebuyers. However, there are options to consider to get a foot in the housing ladder. One option is to consider purchasing starter homes that fit your budget that allow you to climb up the property ladder incrementally over time. An alternative is to consider homes in less desirable neighborhoods or perhaps fixer-uppers, which may require intensive renovations but provide an opportunity to raise equity.
It’s essential to note that the real estate market is highly regional and varies significantly from location to location. While some markets may experience a dip, others may remain stable or even appreciate in value. Therefore, it’s important to stay informed about regional market trends and make informed investment decisions based on local market conditions. Keep your finger on the pulse of the market, be patient, and don’t make hasty decisions in response to market speculations.
