Source: The Ascent —
Did you spend 2022 watching the housing market and shaking your head sadly? You’ve no doubt got company there. But as we head deeper into 2023, there is one tiny bright spot: Redfin recently released some predictions for the 2023 housing market, and it believes that investor activity in the market will ease some this year. This could mean fewer investors buying properties and selling them, and instead sitting on currently owned homes and opting to rent them out.
If you’re hoping to buy a home this year, this potential development should come as welcome news. Here’s why.
A bit of good news for buyers
We started off 2022 in a bad enough spot for buyers, with home prices up nationally. This was thanks to the buying frenzy (and low supply of homes) of 2020 and 2021. Then mortgage interest rates started rising, just adding insult to injury. At the start of 2022, the average rate on a 30-year fixed-rate mortgage was 3.22%, per Freddie Mac. As of this writing, we sit at 6.48% for the same mortgage.
Investors leaving the market won’t have an effect on interest rates, but if there’s less competition for the homes available, you could save some money on your purchase that way (and avoid getting into a bidding war). This could be a good year to offer less than asking for a house, and see what the magic of negotiation can do for you. You could also end up with some seller concessions, like getting your closing costs covered, even if you end up offering the full asking price.
