Brian Decker’s Summer Housing Market Prediction for 2023 With mortgage rates increasing significantly, many prospective buyers have paused their housing searches. With the current uncertainty being felt throughout the market, many homeowners, prospective sellers, and hopeful buyers are feeling cautious about buying. Although the recent compromise over the debt ceiling relieved some uncertainty, mortgage rates increased again this month. With the Fed still trying to curb inflation, another rate hike has occurred. As of June 7, 2023, the average interest rate on 30-year mortgages has risen to 6.91 percent and the average interest rate on 15-year mortgages has dropped slightly to 6.24%. This marks the 10th consecutive time the Fed has met and decided to increase rates in response to inflation. With so much variability in the market, many experts are releasing their projections on what future mortgage rates, home prices, and housing supply will look like this Summer. Read on to get my insights on what the housing market will look like. Will Mortgage Rates Decline? Ultimately, this depends on whether or not inflation rates improve. If inflation stays high, it is likely that mortgage rates will remain high as well. From May 2021 to June 2023, the 30-year mortgage rate nearly doubled. Until inflation decreases, there is no reason mortgage rates will lower. Will the Prices of Homes Go Down? Based on current home prices, it is unlikely that prices will decline. Prices will most likely stay at a steady rate with little change. Even if there was a slight decline in prices, it would not be significant enough to create affordability for buyers. What Will Happen With Housing Inventory? A healthy housing inventory is generally a 6-month supply. Currently, we are down to a 3-month supply. If inflation and high mortgage rates continue to rise, homeowners will be less inclined to put their homes on the market. Why put your home on the market if the inventory is sparse and mortgage rates are high? Keeping an existing fixed mortgage rate in a period of increasing rates seems like the safer option. My Final Prediction High mortgage rates and housing prices create a vicious cycle of low housing inventory. Once rates are high and inventory is low, it is difficult to break the cycle. If inflation stays where it is at now, mortgage rates will likely stay the same. Homeowners will not want to enter the market due to these high mortgage rates, thus hindering an increase in housing inventory. Brian Decker Senior Loan Officer Click to Call or Text: 844-4-Modern This entry has 0 replies Comments are closed.