Real Estate Witch

  • Sell FSBO
    • How to Sell a House Without a Realtor
    • Best Flat Fee MLS Companies
    • FSBO Zillow Listings
    • Best FSBO Websites
    • Best Flat Fee MLS Companies in Florida
    • Companies That Buy Houses for Cash
  • Save When You Sell
    • Low Commission Real Estate Companies
    • 1% Commission Realtors
    • 2% Commission Realtors
    • Discount Real Estate Brokers
    • How to Find a Realtor
    • Realtor Fees
    • How to Negotiate Realtor Fees
  • Reviews
    • Clever Real Estate Review
    • Redfin Review
    • Redfin vs. Realtor
    • Ideal Agent Review
    • HomeLight Review
    • Opendoor Review
  • Blog
  • About
    • Authors
    • Contact Us
  • 808-213-6770
Find Agents

Is It a Good Time to Buy a House?

Is It a Good Time to Buy a House?

Published January 26, 2023

  • Written by Steven Porrello

Written by Steven Porrello

Steven Porrello is a contributing writer to Real Estate Witch, where he specializes in flat fee MLS companies and home selling costs.

2023 home buying trends: Mortgage rates | Home prices | Home supply | Bottom line

The current market makes it a pretty poor time for most people to buy a house. But if you already have stable finances that are guaranteed for the next year or so, or if you’re in an exceptionally strong local housing market, then you might just be ready to be a homeowner.

There’s a reason 80% of respondents to Fannie Mae’s Home Purchase Sentiment Index believe now is a bad time to buy: the median home price (roughly $370,100) is still higher than most people can afford, and six interest rate hikes from the Federal Reserve resulting in the largest single-year rate increase since the 1980s.

Deciding whether it’s a good time to buy a house is a deeply personal choice. Below, we’ll look at some market trends happening right now and help you decide for yourself if now is a good time to buy a house.

Check out last year’s insights

  • Should I Sell My House Now or Wait Until 2023? How to Decide
  • 20 Things to Know When Buying a Home in 2022
  • Millennial Home Buyer Report: 2022 Edition

Is 2023 a good time to buy a house? 3 trends and what they mean for buyers

Trend 1: Mortgage rates are up

Mortgage rates for 30-year conventional mortgages are currently at {mortgage_rates.united_states.30_year_mortgage_fixed}. Higher mortgage rates will make homeownership more expensive and likely detract would-be buyers from entering the market.

Already, a {mortgage_rates.united_states.30_year_mortgage_fixed} base rate for conventional mortgages has pushed homeownership out of reach for around 15 million Americans, according to Freddie Mac. While it’s impossible to predict how high the Federal Reserve will push rates, experts don’t think it’ll get any better in 2023.

What buyers can do

Be sure you can afford a higher mortgage rate. You might have to buy less home or put a higher down payment if the monthly mortgage is more than you can afford.

Get a mortgage pre-approval now. Getting a mortgage pre-approval now means you can lock in to today’s rates before the Federal Reserve raises them again.

Plan on refinancing. Even if you get a higher mortgage rate now, you can still refinance into a lower one later. Just keep your credit score and income the same (or higher) to qualify.

Questions to ask before you buy

  • How much home can you afford to buy?
  • Are you pre-approved for a mortgage?
  • Have you saved enough for the down payment and closing costs?
  • Are you ready to settle down?
  • How’s your credit score?
  • Do you (and anyone you live with) have job security?
  • How does your level of debt compare with your household income?

Trend 2: Home prices are still increasing, but more slowly

In September 2022, the median home price declined 0.52%, continuing a three-month streak of prices shifting downward. The National Association of Realtors (NAR) saw the same trend: the median home price is now {Zillow_Data.united_states.home_value} compared with the record-high $413,800 price tag in June.

Year over year, homes are appreciating at a slower pace — a good sign for buyers who’ve been priced out of the market. Although this median price is higher than $355,700 last October, the price increase from October 2021 to 2022 (6.6%) is now less than the increase from 2020 to 2021 (13.1%). 

What buyers can do

Don’t be afraid to negotiate. Even though it’s still a seller’s market, buyers should feel increasingly more empowered, especially with this research on hand. Competition isn’t as fierce, and you shouldn’t feel timid to negotiate a lower price. 

Avoid homes with inflated prices. Wait for price cuts on homes that are still selling below the median price. And if you’re skeptical about a home’s price, run a comparative market analysis (CMA) for yourself. Or better yet: ask your real estate agent to do it. 

» FIND: Clever can match with top local agents today (100% free with no obligation)

Trend 3: Available homes remain low, but buyer demand isn’t as strong

Home supply continues to be an issue for home buyers. Two major factors influencing home supply right now include: 

  • Reluctant sellers. Around 42% of homeowners feel now is a bad time to sell, according to Fannie Mae’s Sentiment Index. That’s a major increase from 33% in September 2022.
  • Fewer homes being built. With higher borrowing rates and fewer buyers in the market, construction companies are scaling back. In October, home starts were down 4.2%, with single-family homes taking the largest cut (6.1% decline).

» READ: Most Americans Have Regrets About Buying a New Construction Home (2022 Data)

That said, buyer demand also shows signs of cooling off. For one, homes are staying on the market longer, according to the NAR, and they’re receiving fewer offers. In September 2022, sellers averaged only 2.5 offers for their homes, just over half the number they got in April (5.5 offers).

What buyers can do

Take your time and do your research. Even though supplies are low, you should still inspect the property, analyze the price, and feel confident it’s the right home for you. 

Consider off-market listings. With fewer choices on the MLS, you might want to consider distressed or vacant properties, foreclosures, short sales, or auctioned homes. 

Bottom line: Don’t rush into your home purchase!

Even though supply is low, you should still take the time to inspect the property and analyze the price so that you feel confident it’s the right home for you. 

Remember:

  • You can lock in your mortgage rate now, and refinance later.
  • You have negotiating power.
  • You don’t have to settle for an inflated home price.

» NEXT: Should I Sell My House Now or Wait Until 2023? How to Decide

Consider selling in 2023 if:
📉 Your local market favors buyers
🔑 You haven't owned your home for long
💲 You can't afford to move
😊 You're happy in your home
📃 You recently refinanced

Filed Under: Buying a House Tagged With: home buying

About the Author

Steven Porrello is a contributing writer to Real Estate Witch, where he specializes in flat fee MLS companies and home selling costs. Read more

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

nineteen − eighteen =

Need an Agent?

Connect with top-rated agents near you and save thousands on commission fees.

I Want to Learn More

How To Sell Your Home

  • What Companies Offer the Lowest Real Estate Fees?
  • Read This Before You Pay For a Flat Fee MLS Service

Real Estate Reviews

  • Clever: Are Those Commission Savings Legit?
  • Redfin: What It Really Charges Sellers
  • Ideal Agent: Learn the Truth About Its 2% Fees
  • Opendoor: How Much Will It Pay For My Home?

Categories

  • For Home Buyers
  • For Home Sellers
  • Save When You Sell Your Home
  • Costs to Sell a House
  • Sell a House Without an Agent
  • Sell Your House Quickly
  • Real Estate Company Reviews

Real Estate Witch
  • Home
  • Blog
  • About
  • Contact Us
  • Sitemap

Copyright © 2023 Real Estate Witch | All rights reserved.
Privacy Policy | Terms of Service