Why you should explore these revolutionary residential real estate trends for 2023
U.S. residential real estate has been on a roller coaster ride for the last few years. With fluctuating mortgage rates, persistent housing shortages, and soaring property prices, the American housing market has presented significant challenges for those searching for a new home. This article discusses the residential real estate trends to help you understand the challenges and opportunities ahead.
Home and Rental Rate Growth is Expected To Stabilize
- According to CoreLogic’s Home Price Insights report, home prices are projected to increase by 3.1% from January 2023 till January 2024. A continued increase in home prices at an average annual rate of 5.4% is also predicted. Despite the moderation in home prices, mortgage rates remain high, resulting in continued high overall homeownership costs.
A 3% difference in the mortgage rate can add over $700 monthly to the loan costs when financing a home. In contrast, multifamily vacancies are at their lowest point in four decades, while rents continue to set new monthly records. However, the rate of rental increase has been slowing and is expected to decrease further in 2024 if interest rates stabilize.
Western States Face Pronounced Home Price Drop
- Home prices indicated a slowdown in January 2023, particularly in the Western U.S. and other states that had seen appreciation in recent years. Home equity declined in four Western states and Washington, D.C., with notable decreases in Idaho (-$21,400), Washington (-$18,900), California (-$8,500), Utah (-$4,600), and Washington, D.C. (-$8,300). On the other hand, Florida homeowners saw significant annual equity growth in the fourth quarter of $49,000.
According to the Home Price Index (HPI) data, Florida’s home prices have consistently increased compared to the other states. Miami experienced the most substantial year-over-year increase in home prices in January 2023 among major U.S. cities. Tampa and Atlanta followed in second and third place, with Charlotte behind. The Southeastern region remains the strongest in the country, while the Western region continues to show relative weakness in terms of home prices.
Population Growth in the Affordable West May Decline
- The U.S. housing market has expanded substantially, particularly in the Affordable West, including Arizona, Nevada, and Utah. This area has experienced rapid growth due to its lower living costs and more affordable properties. The demand for housing in the Affordable West has surged due to families relocating from various regions and international migration, causing a sharp rise in home prices.
Home prices have exceeded income growth in some places, making it challenging for residents to purchase homes. Several factors, including limited housing supply, bidding wars, and low mortgage rates, have increased home prices in the Affordable West. If this trend persists, it could lead to a decline in population growth in the region as potential residents seek more affordable alternatives elsewhere.
Increasing Interest in Shared Real Estate Purchases
The COVID-19 pandemic has significantly influenced the U.S. housing market, shifting buyer behavior and preferences. One noteworthy trend is the growing prevalence of joint real estate purchases. A recent survey by Zillow reveals that 18% of successful home buyers partnered with friends or family members who weren’t their spouses. This trend is projected to persist into 2024 and beyond. Several factors contribute to the surge in shared real estate purchases within the U.S. One key factor is the increasing cost of homeownership, especially in urban areas.
The COVID-19 pandemic has significantly influenced the U.S. housing market, shifting buyer behavior and preferences. One noteworthy trend is the growing prevalence of joint real estate purchases. A recent survey by Zillow reveals that 18% of successful home buyers partnered with friends or family members who weren’t their spouses. This trend is projected to persist into 2024 and beyond. Several factors contribute to the surge in shared real estate purchases within the U.S. One key factor is the increasing cost of homeownership, especially in urban areas.Sharing the financial burden of a home with others makes it more economically viable for each party involved. Many prospective buyers entering the market in 2024 will adopt innovative strategies to finance home purchases and improve their debt-to-income ratios. By collecting resources, buyers can enhance their purchasing capabilities and meet the criteria for a larger mortgage, simplifying the process of acquiring a home in a highly competitive market.
Looking for a trustworthy realtor in Morris County? Contact Jackie Scura. We are an experienced team of real estate professionals who provide expert guidance and support throughout the home-selling process. Call us at 973-319-8334 for more information.
