As we enter into the new year, many are wondering what the real estate market is going to look like in the foreseeable future. Is a crash coming? Will mortgage rates drop? Will prices fall? There's no crystal ball to look into the future, but we do have data; and that data shows the future of real estate in the Tampa Market is bright.
What is Going to Happen with Mortgage Rates in 2023
Rates shot up quickly and exponentially in 2022. But that wasn't a sign of bad things to come. It was a way to slow down the market and combat the rapid inflation we had seen for some time.
We saw the astronomic rise of more than 5% from December 2021 to November 2022. Thankfully, it seems that we have moved passed the peak. Since seeing highs over 7% in November, we are already beginning to see rates move back into the 5's.
On average, we have seen rates drop a full percent in the last three months. This means the general public just regained about $30,000 in buying power. Those who could only afford a $350,000 home in November, under the same terms can potentially afford up to a $380,000 home.
MBS Highway recently put out their prediction that Mortgage rates would be closer to 5% before the end of the first half of the year. I just had clients approved for a loan at 5.5% and only 3% down, so I don't think this prediction is too far off the mark.
The truth is we are headed into a very brief recession. But recession ins't necessarily a bad word. Historically, recessions have always driven mortgage rates down. Rates will inevitably be falling again.
What Is going to Happen with Prices in 2023
Over the past few years, we have seen home values soar, and it does not appear they are going to be falling any time soon.
As previously mentioned, we are headed into a recession, and as a result of the recession mortgage rates are going to fall. A by product of the fall in mortgage rates, is an increase in buyer demand, which in turn drives prices up.
Will There Be a Housing Crash in 2023