2023 may start slower than we’d like, but agents must be ready when the market inevitably picks up speed, which will likely happen this spring in Minnesota—even if it’s down from the red-hot closed sales we saw in the spring of 2022. “The housing market is a cyclical business,” Dr. Yun said. “Buyers might be retreating right now, but if mortgage rates continue to come down, [buyers] will return.” Yun projects that mortgage rates will indeed come to rest at a more reasonable figure of 5.5% by the end of 2023 if inflation continues to drop—down significantly from the steep peak of over 7% we saw in late 2022.
But with mortgage rates remaining relatively high and more sellers staying put to start the year, the lack of housing inventory will be one of the primary challenges faced by most markets in the country. Job growth trends could also generate fresh housing demand. Overall, low inventory could keep prices up, according to Realtor.com Chief Economist Danielle Hale. She commented, “Home sales may pull back for a time, but will grow when mortgage rates stabilize.” Panelist Danushka Nanayakkara-Skillington, assistant vice president of forecasting and analysis at the National Association of Home Builders, agreed. “Even if prices come down a bit [in some markets], we’ll still be ahead of where we were before the pandemic boom.”
The Year Ahead in Minnesota: MNR’s 2023 Economic Outlook with Lawrence Yun
MNR is excited to host a 2023 real estate and economic outlook webinar with Lawrence Yun on Thursday, January 19, from 10–10:30 am. Dr. Yun will cover the local and national real estate forecast, the evolving economic backdrop, and explain today’s market as compared to past housing cycles. You don’t want to miss this free opportunity to hear one of the country’s leading economic and real estate experts give an exclusive forecast for the Minnesota housing market!
Please note: There is no CE offered for this webinar. To register for the event, click here.
View Dr. Yun’s presentation slides from the NAR Real Estate Forecast Summit here.