What to Expect When Buying a New House in 2023

WORDS: Diana Smith PHOTOGRAPHY Supplied

The housing market was incredibly turbulent in 2022. Buyers battled in bidding wars and struggled to find good properties, while the prices skyrocketed across the market. 2023 is predicted to be a bit gentler on shoppers, but the environment will still present certain challenges this year. To that end, here are some things you can expect when purchasing a new house in 2023:

More buyers than available homes

With a new shortage of housing and the number of interested buyers continuing to rise, the environment will likely be incredibly competitive in 2023, possibly even more than last year. This means you will have to prepare for a bidding war, particularly if you’re buying a starter home, and consider waiving contingencies or adding in an escalation clause. Your housing choices might be limited as well, which is why it’s advised to widen your search geographically, offer more than the asking price, and consider smaller or different types of houses when purchasing your new home.

The prices of houses will increase

In the future, we can expect an increase in house prices year after year, but at a significantly slower pace compared with 2022. The National Association of Realtors predicts an increase of around 2.8% this year, while other experts project the increase will be closer to 7%. In any case, the expected percentage is still in the single digits, coming as good news to those looking for a new home in the crowded and competitive 2023 market.

Insurance is becoming more complex

When buying a home, finding the right insurance policy will probably be among your top priorities, whether it’s due to local legal requirements or simply safety concerns. However, it’s important to be particularly careful with insurance policies, as the number of “junk insurance” cases is on the rise. Being a form of add-on insurance, junk insurance is typically sold along with loans and using unethical sales practices, presenting an often useless and worthless solution to many consumers. Fortunately, I can decide to get my junk insurance refund and you can do the same if applicable. Experienced claims experts will help you get your money back quickly and effortlessly.

Mortgage rates will likely rise

The average mortgage rate remained at a historic low throughout 2022, with most 30-year fixed-rate mortgages floating around 3% last year. Many economists expect that these rates will rise in 2023, but it’s crucial to keep this information in context. Even if rates go up as predicted, they will likely still remain quite low, as most projections range from 3.3% to 4%. This presents a great opportunity for you to select a 30-year fixed mortgage option that will enable you to purchase the home of your dreams even with a slightly lower budget.

Houses might not appreciate quickly

As a result of home prices and mortgage rates increasing steadily, houses will likely appreciate more slowly as well, meaning that it will take a longer time to see a good return on investment when purchasing a home. Of course, this doesn’t necessarily mean you won’t be able to make a profit in case you decide to sell your home in the next few years, as house prices are projected to appreciate from approximately 2% to 7%. Chances are simply higher that you won’t make a particularly large profit.

While buying a home might be a bit simpler in 2023, it will still come with certain challenges. But as long as you create a good budget, work with a reliable real estate agent, and remain patient and persistent, purchasing a new house is more than possible this year.