SOUTHFIELD, Mich. (WXYZ) — Nader Rtial says he and his girlfriend Aggie are lucky they’re not buying a house right now.
“I did do a little bit of looking when we were moving to our new apartment, but we decided against because of how expensive the houses are,” said Rtail, who is not currently looking to buy a home.
Home prices climbed in 2022 along with soaring mortgage rates.
In 2023, Realtor.com forecasts home prices in the U.S. will continue to climb and remain elevated for the first half of the year and then start to fall or remain flat the rest of the year.
“We might not be seeing double-digit appreciation, but we are seeing appreciation,” said Nathan Boji, president of the Greater Metropolitan Association of Realtors (GMAR), Michigan's largest realtor association.
Boji says rising interest rates have also caused home costs to increase. This, Boji said, has discouraged some potential buyers and, as a result, reduces competition.
“People are having more opportunity because that sense of urgency, that ultra urgency that a lot of homebuyers experience over the last couple of years where they were in ultra competitive markets, where they were competing against 20, 30 different offers on a single property and waiving there different contingencies such as inspections and appraisals and things, like that type of stuff is going away,” Boji said.
He says homebuyers can take a breath, not feel rushed and make better decisions.
“In this particular market, the metro Detroit market we’re actually seeing home prices dropping. In certain, I’m seeing home prices drop by $10,000 a month,” said Maynard Neal, broker and owner of NERG Real Estate Experts.
Aside from the impact of rising interest rates on overall costs, Neal says he doesn’t foresee an increase in local home prices in the next year.
But with talk of a recession and potentially more interest rate increases by the federal government, Neal says what’s going to happen is anyone’s guess.
“Things are so all over the place. The best thing that I would suggest if someone’s looking to purchase a home, you have to do what’s best for you and your family because if you wait, there’s no crystal ball per say,” Neal said.
If you are in the market or potentially going to be in market, experts say preparation is key.
Talk to the experts, like a realtor and a mortgage broker to better understand what's out there for you and how it lines up with your goals.
