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Home Buying in 2023 – What can Floridians expect?

January 12, 2023

Home Buying in 2023 – What can Floridians expect?

If you have talked to anyone who tried to purchase a home in 2021 or 2022, you will most likely hear complaints about the lack of housing inventory, competitive bidding wars, and sky-high home prices and mortgage rates, to name just a few issues. Fortunately, as we head into the new year, there are some promising signs that the homebuying tides will turn. 

At The Mortgage Firm North Central Florida, we have served Gainesville and Ocala’s mortgage needs since 2017. Read on for our take on what the housing market will look like come January 1, 2023. 

2023 Positive Predictions for Home Buyers

While we in no way can guarantee that these housing market improvements will occur, the following are what we and other industry leaders believe could happen based on trends we have observed. 

Increased Housing Inventory

Inventory levels seem to be on the rise, and the number of active listings nationwide as of November 2022 had increased by 46.8%, more than 13 points since October 2022. In addition, with many economic experts predicting a recession, sellers may be more apt to list their homes before conditions worsen and the buyer pool potentially decreases. 

Decreased Home Prices 

Added inventory has the benefit of making sellers price their homes more competitively to be able to sell them. This reduces the bidding wars that cause buyers to pay way too much for their homes. 

While Fannie Mae forecasts that while total home sales may hit 5.64 million before 2022’s end, 2023 will see closer to 4.47 million, leading to home prices falling about 1.5% across the nation. Goldman Sachs anticipates a more dramatic decline, with experts suggesting a decrease closer to 5-10%. 

2023 Negative Predictions for Home Buyers

Stagnant Housing Inventory

While some signs point to inventory increasing, some economists do not expect much growth in the new year. One factor contributing to the lack of improvement is that approximately 85% of Americans currently enjoy an interest rate lower than 5%, some due to refinancing during 2021’s boom. As current homeowners potentially foresee interest rates going up even higher, they may not see the value in selling their properties.

Decreased Home Sales 

Some predictions for the first quarter of 2023 include the fall of existing home sales by 31%, with smaller declines in the following quarters. There may be a decrease in new home builds as well, perhaps at around 500,000 across the nation. As fewer buyers buy homes, sellers become reluctant to sell due to low demand for their homes, plus the “lock-in effect” makes homeowners who enjoy low mortgage rates reticent to give up those savings. 

On the other hand, sales could decline by only around 12% in 2023 if inflation slows quicker than anticipated, which allows for the slowing down of mortgage rate hikes and perhaps mortgage rate drops instead. 

Rates – Stalled or Expected Decline

Unfortunately, the average interest rate for a 30-year fixed-rate mortgage in October 2022 was 7.08%, the highest seen since 2002, which is not surprising given that economic conditions like inflation influence mortgage rates. 

It is impossible for us to know with 100% certainty what mortgage rates will be in 2023, but some experts predict that mortgage rates could fall slightly in the first part of 2023 and enjoy a gradual decline in the last quarter of the year. This opens up an opportunity for people wanting to refinance their homes, as well as those looking to buy homes!

How to Become a Homeowner in 2023

Get Your Credit Ready

Your credit score is one contributing factor for your mortgage loan and interest rate qualifications, but it is a significant part. 

Your credit score contains the following information.

  • Credit history length
  • Payment history
  • Amount due to creditors
  • Types of credit utilized
  • Credit inquiries 

If you know you want to buy a home in 2023, start as soon as possible getting your credit score as high as you can. Access your credit report to evaluate your credit health, and take the necessary steps to remove report errors, such as data pertaining to someone else, identity theft signs, account status errors, and incorrect balance or payment information. Then, do what you can to reduce your debt and improve your credit wherever possible. 

Partner With a Knowledgeable Real Estate Agent

Enlisting the help of a local real estate agent who knows the market you are considering buying in can make a huge difference in your success. Many economists and analysts who make predictions for the 2023 market are doing so based on nationwide trends rather than as professionals who understand current and future trends in your specific geographic area. 

Consider What You Can Reasonably Afford

While it is always smart to keep an eye on favorable mortgage rates, some real estate industry experts advise against timing your home purchase in conjunction, particularly if you plan to make the potential home your primary residence for at least 5-10 years. Instead, you should plan to buy based on what you can afford and find a home that suits your family’s needs. 

Choose an Experienced Mortgage Lender 

When you think that your relationship with your mortgage lender can last 15-30 years, it makes sense that this is a crucial step in the home-buying process. A knowledgeable, experienced mortgage lender can help you understand the different types available and which will work best for you. *Insert Link to Loan Types When Live*

Let The Mortgage Firm North Central Florida Guide You

While not all of the 2023 predictions seem positive, there are steps you can take to combat potential economic downturns and challenging homebuying conditions. Your best bet for obtaining the best possible mortgage and buying a home you will love is to trust The Mortgage Firm North Central Florida for expert advice and guidance. We are here to help you become mortgage-ready by offering pre-approvals and the best technology available to make the home-buying process straightforward and simple for you.