Experts share where the real estate market is heading for the rest of 2023.
Are we headed for a recession or a soft landing in the housing market? This question keeps popping up, so today we’re sharing our answer to help shed light on the current situation
There’s been recent speculation about the direction of the housing market. In mid-August, the Fed raised rates after a pause in June, causing discussions among economists from institutions like US Bank and Forbes. We’re here to provide a quick market update on whether we’re entering a recession or a softer transition.
While opinions vary, there’s a consensus among economists that we’re unlikely to experience a significant decline in real estate prices. This stems from a unique situation: although higher interest rates make buying a home more challenging, low inventory, driven by those with low-interest mortgages staying put, counteracts this effect.
This artificially low inventory is expected to keep prices steady or witness a slight appreciation. Economists describe the market as “lukewarm” for the rest of 2023, suggesting a relatively stable outlook. Amidst these developments, some clients have noticed their spending power diminishing due to inflation, particularly pronounced in California, with rising costs like gas and insurance. Consumer debt is increasing, leading some to explore second mortgages to manage this situation. We recommend exploring fixed-rate second mortgages as an alternative to selling a home to pay off debt.
The prevailing message is lukewarm stability. If you’re grappling with increased debt due to inflation, reach out to us for solutions and assistance. As time progresses, we’ll see whether our outlook aligns with market realities. Whether the market remains stable or improves due to potential interest rate adjustments, only time will provide clarity. Feel free to call or email us for support and advice. We’re here to help.
