Housing Outlook Research Brief
New Year Brings Familiar Challenges for
Prospective First-Time Homebuyers
Affordability constraints remain the key storyline in 2023. Prospective homebuyers are encountering the compounded effects of a pandemic price run-up and subsequent surge in mortgage rates. Adding to those challenges is a growing concern over a potential economic slowdown or recession. The possibility of stalled career advancement makes taking on sizable long-term debt unappealing. Residents that have been waiting for the opportune moment to buy a home will struggle to find much relief this year. The average 30-year fixed-rate mortgage entered 2023 above 6 percent, and could remain heightened as the Federal Reserve continues to fight inflation. At the same time, the cost of a single-family house remains roughly $100,000 higher than the pre-pandemic measure, even as buying activity cools, due to a still-low inventory count and limited incentive to relocate.