Spring Vibes: 5 Reasons the 2023 Market is Looking Up
I am thrilled to share that the 2023 real estate market is bright for several reasons – stabilizing market conditions, substantial return on investment for sellers, a thriving and active market, high rental costs encouraging homeownership, and a return to slightly higher mortgage rates that are still below the 50-year average. The market is adjusting to the new normal, and with the Fed’s efforts to control inflation, there is potential for decreasing mortgage rates and opportunities for refinancing.
- Stabilizing Market Conditions – The low inventory levels resulting from the sudden drop in demand during the rise of mortgage rates could have negatively impacted home prices, but the shortage of available homes has actually helped maintain current prices.
- Profitable Returns for Sellers – Despite a possible modest correction in home prices this year, the significant increase in median home prices (39% nationally) as reported by S&P/Case-Shiller suggests that most sellers will still reap a substantial return on investment.
- Rapid Market Movement – The quick turnover rate of homes in the market, with an average market time of just 45 days in the Chicago metro and even faster sale times for homes with no price changes, indicates a thriving and active real estate market.
- High Rental Costs Encourage Homeownership – With rising mortgage rates driving up the cost of homeownership and rental prices near all-time highs in major metros, many are considering the benefits of building equity and receiving tax breaks through homeownership.
- Adjusting to the New Mortgage Reality – The return to slightly higher mortgage rates, although a change from recent years, are still below the 50-year average. The market is slowly adjusting to this new normal, and with the Fed’s efforts to control inflation, there is potential for mortgage rates to decrease, offering buyers opportunities for refinancing.
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