It’s a new year, and you know what that means! Housing market predictions are out. Here at Churchill Mortgage, we want you to have the most up-to-date information to grow your business as a Realtor in 2023. Let’s get into it!
First things first, let’s talk inventory.
We’re all aware that inventory was tight in 2022, and that isn’t expected to change greatly in 2023. There will, however, be a gradual increase in inventory with a more balanced market later in 2023.
- With inventory at 3.1 months’ supply as of September 2022, and up to a 3.3 month supply as of December 2022, we can see a slight swing in the direction of buyers for 2023.
- This is a .09% increase from 12 months ago.
- If hoping to buy a new build, buyers should be prepared for construction to remain slow with building permit applications down about 6% as of October 2022.
Interest Rates
After the crazy low rates of 2020 and 2021, rates in 2022 came as quite a shock to home buyers. The truth, as Realtors know, is that the rates of 5% and 6% aren’t considered to be shockingly high when you look at historical averages. There have been many years with higher rates than that. Yet, seeing a 7% staring back at you when your neighbor bought for 2.9% can hurt.
As we get further into 2023, we should see a slight decline in rates, but nothing major. Remember, interest rates depend on what the Federal Reserve decides to do with the rate hikes they’re making to fight inflation. Freddie Mac believes that a 30-year mortgage could go as low as 6.2% by the end of of the year, with others saying we could expect rates to get as low as 5.5%.
The affordability of homes is something both buyers and sellers are concerned with. Many home buyers, especially first-time buyers continue to feel squeezed out of the market. Sellers are concerned with finding another home to buy after selling, or potentially losing the equity they’ve built up. The good news is there are predictions of housing prices dropping between 5-10% in some areas.
There are still many regions where home prices will continue to hold steady, if not increase. The most important thing to remind clients of is this is nothing like 2008 and no one needs to be worried about a housing crash.
We’re seeing more people looking to purchase investment properties, and 2023 is now being touted as the year of the first-time landlord. With real estate being such a secure investment, many are hoping to diversify their portfolio and reap the tax benefits that come with owning and renting out property.
If your clients are looking to invest, check out our Investment Property Guide!
Rate Relief
One thing to look out for in 2023 are expanded loan programs to help more clients achieve their dream of homeownership. Here at Churchill, we offer Rate Relief. This program allows a buyer to cap their interest rate and receive discounted monthly payments for 24 months. The seller (or builder) will buy down the interest rate for the first two years of the mortgage, giving your buyer time to ease into the costs of homeownership. Their interest rate will be 2% lower in year one, 1% lower in year 2, and then the original rate will lock in year three.
The biggest tip you can give a home buyer in 2023 is to work with a Home Loan Specialist that can find the smartest mortgage plan for their goals. Encouraging a buyer to find out what they can afford before they begin looking will not only make their life easier, but it will give you the information you need to help them find a great home!
Home Buyer Edge
Have your buyers utilize programs that make them stand out when making an offer. For example, Home Buyer Edge by Churchill Mortgage gives buyers a beginning to end plan for stress-free home buying. Here’s what it has to offer:
- Lightning-fast pre-approval: Clients can start shopping for their new home in as little as 24 hours!
- Rate Secured: Buyers will cap their rate for 90 days while you help them find their new home! If rates go down, theirs will too. But if rates increase, theirs will stay the same.
- Certified Home Buyer: This positions your client much like a cash buyer. With most of the underwriting done up front, sellers will be more likely to choose your buyer, knowing their finances are unlikely to fall through.
- $5,000 Seller Guarantee: If the offer falls through due to financing, the seller will receive $5,000 from Churchill, in addition to the earnest money.
Most importantly, make sure your buyers know they have options. The truth is, rates will always fluctuate, that's why home buyers should start building equity, and consider the possibility of refinancing at a later date. After all, when you're renting, your interest rate is always 100%.
Many potential buyers stay on the sidelines because they don’t think they have a big enough down payment, but that shouldn’t hold them back! While 20% down is ideal, many first-time home buyers are finding wonderful homes with 5-10% down. With so many loan programs out there, it’s time people stop paying their landlord and start building lasting wealth through homeownership.
To find out more about the housing market in 2023, make sure to stay connected with our Agent Resources site. We'll be putting out relevant content and eBooks to help you and your clients better understand the state of housing in 2023. And if you’re looking to expand your knowledge and business this year, we’d love to partner with you. Reach out to us today to get started!
Rate Secured is available on 30-year conventional conforming and high-balance fixed-rate loans. Rate Secured is not available on investment property home loans.
The Churchill Certified Home Buyer program is not a commitment to lend funds and is not an approval but is a conditional approval subject to your acceptance of the terms and the conditions being fully satisfied prior to closing. All conditions are subject to final underwriting and final investor approval. The certification is subject to the financial status and credit report(s) of everyone on the application remaining substantially the same until closing, an acceptable contract of sale on a suitable property, collateral (the appraisal, title, survey, condition, and insurance) satisfies the requirements of the lender and loan selected is still available in the market. All closing conditions of the lender must be satisfied including the clear transfer of the title, acceptable and adequate title and hazard insurance, flood certification, and any inspections that are required by the real estate contract.
Seller Guarantee is for qualifying borrowers and select loan types only and are not available in all states or locations. Offer only valid on home loans closing on or before December 31, 2023.
