Lehigh Valley home prices will continue to increase in 2023, report says
The price of homes will not decline in 2023 even with higher mortgage rates, according to Realtor.com's housing forecast.
There still may be some relief in the house-hunting process though, as buyers may find fewer competitors for homes.
"Compared to the wild ride of the past two years, 2023 will be a slower-paced housing market, which means drastic shifts like price declines may not happen as quickly as some have anticipated," Danielle Hale, chief economist for Realtor.com, said in a statement. "It will be a challenging year for both buyers and sellers, but an important one in setting the stage for home sales to return to a sustainable pace over the next two to three years."
For the Lehigh Valley, Realtor.com forecasts a 1.9% increase in sales and a 4.7% increase in prices.
First-time buyers will face challenges in the New Year. The high cost of renting makes saving for a down payment difficult.
While incomes are forecast to increase 3.9%, that will not keep up with higher mortgage rates (estimated at an average of 7.4% in 2023 and home prices (up 5.4% nationally). Realtor.com forecasts an average monthly mortgage payment of $2,430, 28% higher than in 2022.
Economic disruption can throw forecasts off. Realtor.com advises buyers and sellers to watch for risks such as a big weakening in the job market. If the economy moves into a recession, that would mean lower mortgage rates but also lower purchasing power for buyers.
"Of the many factors that are expected to affect the housing market in 2023, affordability tops the list of issues most likely to make or break buyers' plans," Hale said.
She advised that would-be buyers be prepared with a "healthy dose of patience."
Realtor.com is an online real estate marketplace.