When a list of predictions includes that the US housing market will not experience a “wave of foreclosures” one can assume the forecast for 2023 is not filled with optimism.
That point was among a string of predictions Redfin made for next year, according to a release this week. Among its others:
“Mortgage rates will take center stage in 2023, with high rates likely to make it the slowest housing-market year since 2011,” the real estate brokerage said.
Home sales will fall to their lowest level since 2011, followed by a slow recovery in the second half of the year as mortgage rates fall to below 6% by the end of year.
Nonetheless, home prices will post their first year-over-year decline since 2011.
Gen Z, Millennials to Remain Renters
Builders will focus on multifamily housing and Gen Z and Millennials will continue their lives as renters, as rents fall and new-home construction building permits drop by roughly 25%.
Gen Z, in fact, will seek jobs and apartments in relatively affordable mid-tier cities as they are “entering into a workforce with more remote-work opportunities than ever before, which means they’ll have more flexibility in where they’ll choose to start their careers than older generations.”
Agents’ Commissions to Rise Slightly
Buyers’ agent commissions will rise slightly as fewer agents broker fewer deals at lower prices, Redfin said, after the hot pandemic-era housing market pushed the typical U.S. buyers’ agent commission down to 2.63% of the home’s sale price in 2022, its lowest level since at least 2012.
Where they will be buying should be the most stable and relatively affordable markets in the Midwest (Chicago) and the Northeast (Connecticut and upstate New York).