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Everything You Need to Know About Buying a Home this Year

Authored By: Genisys Credit Union on 3/8/2023

Couple moving in home

If you’re planning to get a home loan this year, you likely know you won’t be dealing with typical circumstances. The real estate market has been completely upended by the pandemic along with its ensuing financial fallout, and it has yet to recover. While the extreme market conditions that characterized the last two years are beginning to settle down, the market is still far from stable.

Here’s what to expect when buying a home this year, and how to make the most out of the current market conditions.

Flattening Home Prices

Home prices shot up by 18.2% year-over-year in 2021, and then a generous 9.6% in 2022. The National Association of Realtors (NAR) predicts median existing home prices will inch up just 0.3%, and new homes will rise by 1.3% in 2023. This is fabulous news for buyers who were looking at inflated prices on homes these last two years. 

Stabilizing Mortgage Rates

Mortgage rates more than doubled in 2022, from approximately 3% to more than 6%, further driving up the price of buying and owning a home. In contrast, the 30-year fixed mortgage is expected to average between 5.2% and 6.8% in 2023, according to recent predictions by Fannie Mae, Freddie Mac, the Mortgage Bankers Association and the NAR. 

While the Federal Reserve still plans to raise rates, it’s slowed its pace, with the most recent increase on February 1st being just 0.25%, as opposed to previous 0.75% hikes. Lenders will likely slow down their interest rate increases as well.

More Negotiating Room for Buyers

In recent years, the home-buying process was characterized by fierce bidding wars, which left little to no room for buyers to negotiate. That’s about to change. With the supply of available houses on the market creeping closer to matching the demand, buyers will have more negotiating power and will be able to stand firm on their personal preferences, like home inspections and a lower price. 

Tips for Buying a House in 2023

If you plan to buy a new house this year, here’s how to prepare for and ensure a smooth and successful process. 

If you plan to buy a home in 2023, you’ll be dealing with a market that’s slowly settling down, but is still far from stable. Use this guide to learn what kind of market conditions you’ll be facing and how to prepare for the process. Contact the Mortgage Team at (248) 745-3353 with any questions you may have!

 

© Genisys Credit Union and www.genisyscu.org, 2023. Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and www.genisyscu.org with appropriate and specific direction to the original content.



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