2023 will be here just a few days! Time has flown (or felt like it crawled?) and the housing market has had yet another — let’s call it — interesting year. It’s only fair to be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about buying a home. Let’s take a look at the latest insights on both mortgage rates and home prices so that you can make your best move possible.
Mortgage Rates Will Continue To Respond to Inflation
Yes, our old nemesis inflation has had a hand in the increase in mortgage rates. While this isn’t shocking, the increases we’ve seen have been more dramatic than a Netflix documentary. The average 30-year fixed mortgage rate surpassed 7% at the end of last month; however, the silver lining? It’s the first time they’ve risen this high in over 20 years. (see graph below):
Because we’re in unprecedented territory, it’s hard to say with certainty where mortgage rates will go from here. While inflation is starting to level off, projecting the future of mortgage rates is far from an exact science, but experts do agree that, moving forward, mortgage rates will continue to respond to inflation.
Home Price Changes Will Vary by Market
Markets are not one size fits all — more like a custom fit depending on a number of factors. As buyer demand has eased this year in response to those higher mortgage rates, home prices have moderated in many markets too. In terms of the forecast for next year, expert projections, like movie reviews, are mixed. The general consensus is home price appreciation will vary by local market, with more significant changes happening in overheated areas.
Some areas may still see slight price growth while others may see slight price declines. It all depends on other factors at play in that local market, like the balance between supply and demand. This may be why experts are divided on their latest national forecasts (see graph below):
You don’t need to play a guessing game! If you want to know what’s happening with home prices or mortgage rates, let’s connect so you have the latest on what experts are saying and what that means for the Las Vegas Valley.