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When it comes to predicting the future of the housing market, the most reliable factor to consider is the interest rate. As interest rates increase, so does the cost of borrowing money and the cost of buying a house. This in turn leads to a decrease in home purchases and an increase in rental payments. With this in mind, it is easy to see how the current market could potentially be affected by the summer of 2023.
It is important to note that the current market environment is ideal for buyers. Specifically, the average 30-year fixed-rate mortgage interest rate was 4.42% as of March 24, 2022. This rate has since increased by 2% in just one year. This indicates that rates are likely to remain high, or even continue to increase, in the near future.
Further exacerbating the issue is the fact that the median home sale price decreased by 1.2% year over year in February 2023, while the number of homes sold decreased by a massive 22.3%. These figures suggest that the housing market could potentially slacken even more as we approach the summer of 2023.
Nevertheless, it is important to keep in mind that the housing market is largely dependent on the economy, which is expected
to recover over the coming years. The International Monetary Fund forecasts that global economic output will expand by about 5.5% in 2022, 4.4% in 2023 and 4.0% in 2024. Such growth can only be beneficial for the housing market.
One possible scenario suggests that the current trends will continue in the summer of 2023, with home prices decreasing and interest rates remaining relatively high. However, if the IMF’s prediction of a global economic recovery proves to be accurate, then the housing market could become more attractive for buyers, potentially reversing the recent trend of declining home prices.
At the end of the day, the housing market come summer 2023 will depend largely upon the strength of the global economy. If the economy continues to gain strength, then the housing market could become an attractive option for buyers once again. However, if the IMF’s predictions are wrong and the economy stagnates, then the housing market could
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