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UMortgage's 2023 Housing Market Predictions

January 2, 2023

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UMortgage's 2023 Housing Market Predictions

Calling the 2022 housing market a roller coaster may be overstated, but that doesn't necessarily mean it's not true. The year was a tale of two halves, with historically low rates seeming to be a thing of the past as inflation-busting tactics by the Federal Reserve caused rates to increase throughout the year.

While last year was unique, each year brings its ebbs and flows to the housing market. It’s nearly impossible to predict exactly what will happen within this year’s market, but we’ve compiled some insight to help you prepare for 2023.

Will Home Prices Drop?

Prospective buyers’ eyes typically gravitate towards a few features when shopping for their next home: location, square footage, the number of bedrooms and bathrooms, and perhaps most importantly, price tag. While the dollar amount on a home doesn’t exactly equate to its affordability, any potential price drops next year could encourage individuals to begin their homebuying journey. Which begs the question: will home prices drop in 2023?

2022 was a case of two halves. Using data from July, the Case Shiller index reported a drop in home values for the first time in 2012. However, with that drop in value, the market also saw fewer listings. That lack of supply brought a slight uptick in value to end the year as 2022 finished with an increase of 8-10% in home value year-over-year in many according to insight from John Toohig, Managing Director & Director of Whole Loan Trading at Raymond James.

All this to say, a continued downtick in supply will likely see prices trend in the opposite direction.

What Will Happen With Mortgage Rates?

Throughout the year the Federal Reserve has steadily increased the Federal Funds Rate to fight inflation, which has also brought a steady increase—amidst some general volatility—in mortgage rates throughout the year.

The biggest key factor to bring a decrease in rates in 2023 will be unemployment rates. “Unemployment remains the last opponent to Fed Reserve Chair, Jerome Powell’s, rate hike,” said Toohig. “If we see weakness in wage growth and in the unemployment rate, we’ll start to see rates come down even faster.”

The 2023 housing market may bring its own challenges, increasing the importance of the places individuals look for their home loan. UMortgage loan originators can create life-changing opportunities through homeownership for many homebuyers through the platform’s better pricing, lender optionality, more-intuitive tech stack, and dedicated support staff.

If you’d like to learn more about how UMortgage can help you increase your business in 2023, sign up for the weekly Discovery Meeting hosted by Anthony Casa and a rotating cast of UMortgage’s top talent.


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