the housing market is sending clearer signals that historically low mortgage rates and the homebuying frenzy have come to an end as we near the end of 2022 here’s a look at the expectations of real estate experts for 2023 danielle hale realtorcom chief economist after several years of an unambiguous sellers’ market the 2023 housing market could feel more like a nobody’s market we expect to see some buyer advantages in the form of 228 more homes for sale however the increase will result largely from homes taking longer to sell amid challenging affordability conditions forsale homes will remain highpriced with the national annual median price for 2023 expected to advance another 54—less than half the pace observed in 2022 still high prices mean that homeowners are likely to walk away from a home sale with significant equity if they decide to venture into the market and can find a buyer on the whole however we expect home sales to be dramatically lower down 141 compared to 2022 as both buyers and sellers pull back from a housing market and economy in transition we expect the annual tally for 2023 to be roughly in line with the recent pace of home sales in late 2022 for many potential firsttime home buyers 2023 will herald a delayed dream rather than a celebration as home costs exceed what’s possible on their budget and income as fewer households make the jump to homeownership increased rental demand could help keep rents moving higher nationwide the median rental is projected to increase 63 in price even as an influx of new multifamily housing helps to better meet rental demand renters looking to save in the year ahead may consider moving further out to the suburbs a still strong jobs market will keep incomes growing at a faster than historically average pace 39 but they will not exceed expected inflation 41 which means that many households will continue to make tough budget tradeoffs after years of highflying tech cities dominating real estate who’swho lists this years top performers are expected to be modest midsized domestic industry hubs in the northeast south and midwest the slow and steady real estate markets in these areas where homes continue to be affordable will be the stars in 2023 better weathering the affordability challenges that loom ahead bob pinnegar president and chief executive officer of the national apartment association pursuing sustainable and responsible solutions to address our nation’s housing affordability crisis will remain a steadfast priority in the new year our nation’s affordability challenges stem from an alarming supplydemand imbalance and to properly address this we must build 43 million new apartments by 2035 on the economic side supply chain issues have begun to ease and will hopefully continue to in the year ahead while jobs are steady the labor market faces challenges in areas like construction where workers are needed inflation is starting to show signs of easing but any of those impacts are unlikely to be seen until the end of 2023 state and local lawmakers continue to consider damaging policies like rent control which more than 40 years of academic research and reallife case studies consistently reiterate is ineffective in addressing affordability rent control distorts the housing market by acting as a deterrent and disincentive for rental housing development and expedites the deterioration of existing housing stock as these policies continue to be discussed the rental housing industry will continue to advocate for responsible solutions – like revitalizing section 8 and removing barriers to apartment development  that will improve affordability challenges longterm nick bailey president and ceo of remax llc one thing i can say for certain about the housing market in 2023 is that no matter the macroeconomic conditions americans will continue to buy and sell millions of homes generally speaking when we’re talking about the overall health of the housing market most people are approaching that conversation from the lens of an investor will the market bottom out or have we hit the top that’s an important conversation but the truth is people are getting married divorced moving to care for aging family members relocating for career opportunities and so on every single day and for those people it’s less about the interest rate or mortgage rates that week and more about their present situation and whether they can afford a house that fits their needs i’m optimistic that 2023’s spring selling season will be a bright spot as levels of inflation get more under control there will still be extreme demand as new construction just can’t get out of the ground fast enough and the millennial home buyers who make up a huge demographic are primed to make their move according to a recent survey conducted by remax in partnership with swns media group 84 of gen z 79 of millennials and 61 of survey respondents 77 or older plan to buy a house or condo in the next few years in my opinion 2023 will be a better year for housing than many people think especially because well no longer have yearoveryear comparisons to 2021 – an historic outlier that made 2022 seem less than what it really was jacob channel senior economist for lendingtree the housing market will remain tough for many wouldbe buyers while mortgage rates might stabilize prices could decline and buyers may be able to negotiate with sellers more in 2023 than they were able to over the height of the pandemic that doesn’t mean that buying a home is suddenly going to become a walk in the park on the contrary affordability challenges will likely persist for many owing to rates remaining steep and supply remaining limited borrowers shouldn’t expect rates to fall to anywhere near their record 2021 lows or even to as low as they were at the start of 2022 home prices won’t necessarily fall everywhere but a combination of relatively high rates and weak home buyer demand will probably push prices down nationwide this year although a 5 to 10 drop may seem steep it’s important to keep in mind that because home values rose so much over the height of the pandemic declines this year are unlikely to totally wipe out the gains that many homeowners saw over the past few years lawrence yun chief economist for the national association of realtors and senior vice president of research 478 million existing homes will be sold prices will remain stable and atlanta will be the top real estate market to watch in 2023 and beyond home sales will decline by 68 compared to 2022 513 million and the median home price will reach 385800 – an increase of just 03 from this year 384500 half of the country may experience small price gains while the other half may see slight price declines however markets in california may be the exception with san francisco for example likely to register price drops of 10–15 rent prices will rise 5 in 2023 following a 7 increase in 2022 foreclosure rates will remain at historically low levels in 2023 comprising less than 1 of all mortgages the gross domestic product will grow by 13 roughly half the typical historical pace of 25 after eclipsing 7 in late 2022 the 30year fixed mortgage rate will settle at 57 as the fed slows the pace of rate hikes to control inflation that is lower than the prepandemic historical rate of 8 taylor marr redfin deputy chief economist slowing inflation and the hope of the fed easing rate hikes in the new year are likely to bring mortgage rates down further and thereby improve homebuying demand but don’t call it a comeback or even a recovery yet demand is still way down from its peak we’re keeping a close eye on the labor market for confirmation that inflation will continue slowing a strong job market like the one we have now contributes to inflation because it pushes up wages and leads to higher prices though it seems counterintuitive a slight uptick in unemployment andor slower economic growth would likely help bring mortgage rates down further if that happens the increase we’re seeing in earlystage demand could translate to an uptick in pending sales in early 2023 selma hepp interim lead of the office of the chief economist at corelogic following the recent mortgage rate surge above 7 real estate activity and consumer sentiment regarding the housing market took a nosedive home price growth continued to approach single digits in october and it will move in that direction for the rest of the year and into 2023 however while some housing markets have seen significant recalibration since the spring price peak and are likely to post losses in 2023 further deteriorating forsale inventory some relief in mortgage rate increases and relatively positive economic news may help eventually stabilize home prices jeff tucker zillow senior economist the rental market is cooling but to this point it hasn’t brought any real relief for renters however there are signs affordability may improve in the coming months annual rent growth has fallen from a record 172 annual growth in february to 84 yearoveryear growth in november renters looking to sign a new lease in 2023 should feel encouraged about this data but still need to keep a close eye on the market and act quickly when they find a rental that fits their needs and budget rents are still higher than they were prepandemic so tradeoffs and flexibility will still be necessary into next year renters facing a renewal should know that they’ve got more bargaining power this year and should carefully consider the prices of other nearby rental options when negotiating a lease renewal kuba jewgieniew ceo and founder of realty one group homeowners will stay in homes due to lockedin lower interest rates regarding realtors 300000 to 400000 new licensees entered the real estate market over the past couple of years similar to the relative percentage growth of nar members between 200507 many topproducing professionals and teams that have been closing 100 million per year in transaction sales chose this career path during real estate’s hot markets 20122020 so they haven’t experienced a severe downward cycle like this since 2008 there are more than 90000 real estate brokerages in america of these many will consolidate and others will get wiped out their plan b funding source for access to capital just to stay afloat are friends and family the average interest rate on a credit card is now at a high of over 18 and expected to be in the 20’s soon home equity lines of credit are increasingly popular during high inflationary times lisa sturtevant chief economist for bright mls over the past year the housing market underwent an aboutface as rapidly rising mortgage rates dramatically slowed home sales activity in 2023 the housing market is expected to continue its correction and the housing market will start to look more normal though we may need to reconsider what normal means mortgage rates will decline slowly in 2023 though will remain above 6 for most of the year while not high by historic standards 6 mortgage rates along with fastrising prices will also keep some prospective buyers out of the market bright mls’ forecast suggests that there will only be 487 million home sales in 2023 down 6 compared to 2022 and the lowest level of sales activity in nine years the median home price is expected to be relatively flat in 2023 rising just 03 yearoveryear but the national figure does not tell the whole story local markets that are more affordable and where the local economy is strong will see stronger price growth in the year ahead in contrast highercost metros where housing affordability is a challenge are at greater risk of price drops in addition pandemic boom towns where demand surged will also see greater price corrections in 2023 the frenzied pace of home sales activity during the pandemic was not typical or sustainable nor is it good for a healthy stable housing market a return to a slower market with more modest price growth is a good place to be headed in 2023 ld salmanson ceo of cherre a data integration and insights platform looking at the current market we are seeing fewer transactions and increasing days on market low absorption rates indicate a price gap between buyers and sellers historically this environment had been temporary people lost their jobs while still carrying mortgages at variable rates this will likely force sellers to have a reality check in 2023 needing to lower prices to make the sale as interest rates continue to rise the housing market is less appealing to potential buyers and mortgage applications are extremely low though a few very specific markets have sustained demand most markets will see large corrections and some markets like south florida will even experience 2030 price drops any time there is a hot housing market with a sharp increase in the median home price there is the possibility of a housing bubble after home prices hit their peak in june we saw the first decline in home price growth in 10 years with the lagging caseshiller index showing price increases falling 13 black knight also reported that us home equity dropped 76 in q3 marking the largest drop since 2009 though we are not technically currently in a housing bubble or experiencing a major market crash declining prices coupled with interest rates climbing higher than 714 indicates that we are experiencing a market downturn that will continue into 2023 kate wood home expert at nerdwallet after three years of a wildly unbalanced housing market it’s tempting to hope 2023 will at last bring normalization but the market remains far from normal even if it’s no longer going to extremes rates have fallen from the peaks of october and november but with continued upward pressure from the federal reserve the lows we’re seeing now could just be the eye of the hurricane and major economic or geopolitical changes could as they did this past year totally upend rate forecasts home prices will likely continue dropping next year but this won’t be a bubble bursting these price drops will be more like a balloon slowly deflating no longer headed skyward but still hovering out of reach for many markets seeing the most significant drops will be those where home values grew the most rapidly so even with prices dropping home values will probably still be up yearoveryear even with higher interest rates forcing some buyers out of the market demand will likely continue to outstrip supply because the supply just isn’t there many wouldbe sellers will likely be unwilling to give up the historicallylow interest rates they purchased at or refinanced to for a rate that could be double we may see an increase in homeowners moving without selling instead of giving up the low payment on their previous homes they’re keeping them and converting them into singlefamily rentals with a tenant’s rent covering the mortgage while the owner’s equity continues to grow this can be a winwin for the seller for home buyers though these are more potentially affordable homes that won’t go on the market nonetheless buyers will probably continue to gain traction in 2023 jamison manwaring ceo and cofounder of neighborhood ventures 2023 will be the first normal year for housing since 2019 after big run ups in housing costs in 2020 and 2021 followed by 4 increase in interest rates to slow the market in 2022 2023 is set up to be a more normal year as interest rates stabilize and more newly constructed housing units are added the supply of new units will be offset by the number of homeowners not moving because their interest rate is much lower than a new loan new home and multifamily construction projects slated for delivery in 2024 and 2025 will be delayed because the runup in interest rates have made these ventures less profitable housing costs will remain flat and may even decline in some sun belt markets additional supply of new construction multifamily units will be delivered throughout 2023 mostly in sun belt states helping to ease housing costs these high growth areas have suffered from housing shortages and new supply has been slow due to materials and labor shortages and covidrelated delays but many of these projects will be delivered during 2023 adding thousands of additional units jack macdowell chief investment officer at palisades group our base case shows housing activity dropping significantly in 2023 due to lower levels of purchase demand and limited housing inventory at least through the first half of 2023 persistent labor market imbalances created in part by an undersupplied labor force will likely keep inflation elevated and policy rates restrictive barring unforeseen events geopolitical or otherwise we would expect volatility to subside alongside the fed reaching the zenith of rate hikes leaving room for mortgage rates to drop below 6 and easing the debt service burden for wouldbe home buyers we expect mortgage delinquencies to rise as disposable income levels and consumer savings diminish however given the default management toolkit and large amounts of home equity we are unlikely to see a material increase in foreclosure activity that leads to distressed property sales 2022 and 2023 will likely be remembered as the years where the housing market sowed the seeds for future pentup demand as wouldbe home buyers continue to get forced into the rental market due to affordability pressures in the absence of new supply added to the housing stock the release of this pentup demand could come as soon as 2024 lazer sternhell ceo of  the federal fund’s target rate is projected to hit 46 in 2023 which makes it extremely difficult for investors to evaluate multifamily deals what will interest rates be at closing what refinancing events will be available down the line and what will an exit strategy look like investor preference will continue to be focused on free market buildings in prime locations instability in the capital markets and rising interest rates have significantly curtailed multifamily investment activity and higher commercial mortgage rates are sending buyers to the sidelines private buyer tolerance for volatility keeps investment activity afloat if rates stabilize in 2023 institutional investors will provide a further tailwind to the multifamily investment market multifamily’s underlying solid fundamentals over the last 10 years delivered an average annual total return of over 9 we expect multifamily to perform above average in 2023 despite economic headwinds and ongoing capital market disruptions multifamily real estate is one of the best asset classes for hedging inflation investors will wait for the multifamily market to stabilize