Were you one of the homebuyers who decided to put off buying a home in 2022? We can certainly understand! The real estate market – especially on Oahu – has experienced a frenzy in the last couple of years. With soaring housing prices and fierce competition, it was tough for many buyers to get an accepted offer on a home. But now that interest rates are rising and demand is leveling off, what does that mean for homebuyers this year? Let’s take a closer look.
Interest rates for mortgages are stabilizing
During the pandemic, the federal government decreased interest rates to record lows. But now that we’re experiencing the effects of inflation, mortgage rates are on the rise. In 2022, mortgage rates more than doubled, from approximately three percent at the beginning of 2022 to more than six percent at the end. The good news is, as of January when the Consumer Price Index was released, we experienced the lowest interest rates in four months. In addition, many experts have forecasted that mortgage rates will likely level off in 2023 to around five to six percent. While this is still up quite a bit from the lows we saw in 2020 and 2021, these rates will make it more affordable to buy a home in 2023 as compared to 2022.
Home prices are leveling off
Mortgage rates aren’t the only things that will be stabilizing in 2023. Experts also predict that home prices will be leveling off, including here in Hawaii. The National Association of Realtors predicts that median prices on existing homes will only rise by .3 percent in 2023. This is in sharp contrast to the rapid increase in home prices in 2021 (18.2 percent) and 2022 (9.6 percent). If you’re in the market for an Oahu home, then you can expect home prices to level off.
Buyers have more room to negotiate
While the last couple of years greatly favored sellers in the real estate market, buyers will have more negotiating power in 2023. A stabilizing market will create a more level playing field between buyers and sellers. While many buyers were willing to do just about anything in 2020 and 2021 – such as waiving all contingencies and offering well above the asking price – those tactics should no longer be necessary. Buyers should feel confident making offers with contingencies, such as a home inspection contingency or an appraisal contingency. In addition, buyers won’t have to sweat making an offer well above the asking price or making a knee-jerk decision on a home. You’ll have a little more time to sleep on your decision.
Contact Keller Williams Honolulu today!
One of the smartest things you can do as a homebuyer in 2023 is to work with a trusted real estate agent that is an expert in your market. If you’re ready to buy an Oahu home, then contact Keller Williams Honolulu at 808-596-2888 or [email protected] and browse our recent home listings. Our talented group of real estate professionals has the experience and market knowledge to help you achieve all of your Hawaii real estate goals. Contact us today!
