2023s top prediction

GM. This is Mortgage Nuggets, the newsletter that’s short, quick, & full of greatness. You might as well call us Lionel Messi.

It’s been a big year for us and we couldn’t have done it without you. Thank you for always reading and sharing. Today, we’re exploring the top 5 predictions for 2023.

Welcome to the 467 new folks joining us since Monday :)

Today's newsletter is 400 words, a 2.5-minute read. Brief!

 NUGGETS

1. Home sales will fall (USA Today/NAR/Redfin)

Home sales are expected to hit a 10-year low in 2023 due to rising mortgage rates which are making housing costs too high for many buyers. Despite this, the strong job market and high homeowner equity are expected to prevent a surge in foreclosures.

2. Mortgage rates will decline (Zillow/Redfin/NAR)

While we may not see rates as low as 3%, it is expected that rates will drop below 7%, providing relief for buyers. Redfin expects the 30-year fixed mortgage rates to gradually decline to around 5.8% by the end of the year, with the average 2023 homebuyer’s rate sitting at about 6.1%.

3. 2023 is not 2008, and there is no housing bubble (Windermere/Bright MLS)

The housing market today is significantly different than it was in 2008, and changes in lending practices have greatly impacted the market. Therefore, it is not expected that 2023 will see a housing crisis similar to the one experienced 15 years ago.

4. Housing affordability will remain an issue (CAR/USA Today/Windermere)

• Despite home price growth slowing in 2023, affordability will remain an issue because this slowdown isn’t enough to offset the insufficient supply of homes we need on them. According to C.A.R. affordability is expected to drop to 18 percent next year from a projected 19 percent in 2022.
  

  5. There won’t be a surge in foreclosures (USA Today/Redfin)

  Prices remaining high makes a wave of foreclosures unlikely next year. Few homeowners will fall underwater on their mortgages even with anticipated price declines due to fixed low mortgage payments and plenty of home equity after values rose during the pandemic.

 CHART

🏡 Homes Linger on the Market as Buyers Take Their Time

The supply of homes for sale posted a record year-over-year increase this week as homes linger on the market.

But some buyers are making their way back, with Redfin’s Homebuyer Demand Index showing an uptick in early-stage demand.At its June 2022 peak, the Pandemic Housing Boom saw U.S. home prices rise 41.4%.

MILKY MEME

🎊 See y'all in 2023!

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