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The year 2022 brought a thriving residential home investment market to its knees.

But you’d never have guessed that based on how the year started, with skyrocketing home values and bidding wars. When the Federal Reserve began raising interest rates in February in its efforts to curb inflation, followed by another six increases, the market landscape looked very different. As the residential real estate market heads into 2023, the obvious question is: How will it perform for investors in 2023?

One thing is for sure at the end of 2022, fewer people are buying homes. According to the National Association of Realtors (NAR), the rate of contracts to buy previously owned homes in the U.S. fell for the sixth straight month in November. Based on signed contracts, the NAR’s Pending Home Sales Index fell 4% to 73.9% last month from October’s downwardly revised 77%. Save from the early months of the pandemic, the November numbers were the lowest reported by the NAR since 2001.