Northeast San Antonio | Will Home Prices drop In 2023
Will home prices drop in 2023? When will mortgage interest rates go down? The answers to those questions right now!
So, will mortgage rates come down? Let’s get into that question now and what they’re doing because the mortgage interest rates control the entire Market. You can’t have runaway prices without super low-interest rates, as we did a few years ago. And right now, we’re in a more normal interest rate environment.
Mortgage Rate Trend Since November
Looking at this first graph here and it shows that we’re currently in a downward trending mortgage rate trend. Each week since, rates have fluctuated up and down, but overall the trend has been to the downside as buyers come in and out of the market. The essential news here is that the Fed has scaled back the size of the rate increases. Last year at each meeting, the increases were 3/4 of a point. In the last meeting a week ago, the rate increase was only 1/4 point. This indicates to the market the Fed may be getting closer to being satisfied where rates are concerned.
How Mortgage Rates Affect Home Buyer Activity
Switching over to this next graph shows the buyer demand from the beginning of the year to about February 3rd. As you can see, buyer demand starts as limited in the early part of the year with a 6.5 or more interest rate and continues to gain strength as interest rates have fallen.
So will mortgage rates come down even further? My short answer is no, not any time soon, not without additional outside help meaning the FED reverses course and cuts rates.
In response to this, what we’re seeing now in the market is that seller contributions to buyer closing costs have gone up significantly. Last year the average seller contribution here in northeast San Antonio was $3,755 this year, the average seller contribution is now $7,099.
What’s happening with this money is is buyers are using it to not only pay for traditional negotiations like closing costs repairs things like that, but they’re also using it to buy down their interest rates. Some are going the permanent route which is much more expensive, and others doing the temporary route and plan to refinance later.
Will Home Prices Fall In 2023
In my opinion, as long as interest rates stay in that 6.5 to 6% range, our home prices in Northeast San Antonio stand a chance of remaining relatively stable in 2023. I don’t see anyone running away with high appreciation rates as we saw over the past few years. But I also don’t think we will see a big downside in the overall area.
Each Neighborhood will be different as well as each suburban area here in Northeast San Antonio. Windcrest, Live Oak, Converse, and Universal City all fluctuated over the past couple of years.
In closing
No one can predict 100% actually what’s going to happen in the 2023 housing market, no matter how hard we all try. But if you are a buyer, keep in mind that if this is a move you’re making that will last five years or longer North East San Antonio is still a destination area for other buyers coming from much higher-cost markets. If your plan is shorter term, you need to exercise much caution.
For home sellers entering the market, it’s still, in my opinion, a great time to sell. We still have record-low foreclosure inventory to compete against. And although some of the headline numbers you might hear of in the media sound big. In actuality, they are not impacting the current market conditions. So this could still be a golden selling opportunity despite missing out on the madness that happened before.
Thank you so much for your time today. If you’re thinking about buying or selling in the near future and have questions let’s connect.