2023 housing market forecast: When will homes become affordable again?

ORLANDO, Fla. — The upcoming home buying season will not be a red-hot threepeat like the past two, but low inventory should keep prices elevated, one of Orlando’s most notable real estate agents predicted.

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Ray Lopez, a Keller-Williams agent, said the market would be defined by interest rates, which are currently hovering around the mid 6′s and double what they were a year ago.

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That’s keeping new buyers from putting money toward down payments, but also making current homeowners hesitate about upgrading their lifestyles.

“Do they want to give up their 3% interest rate to move to a house with a 7% interest rate?” Lopez asked, rhetorically.

That trend is keeping Orlando’s housing inventory low. As of the week before Christmas, the region had fewer than 5,000 homes available, which is approximately half of the normal amount.

While the market is in its slow season, buyers beginning to look will find fewer options and increased competition. Lopez said buyers will avoid a house needing a lot of work but asking for a premium price, unlike last season where it likely sparked a bidding war.

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Still, homes without too many issues will fetch top dollar, he said.

“Houses that look nice, smell nice, sell for more,” he said. “We need to really be able to hyper market it to the areas where people are moving here, from like South Florida, like the eastern seaboard.”

For people choosing to remain on the sidelines this season in hopes prices fall, Lopez said Florida’s inventory issues would prevent another market crash like the one the state experienced in 2010.

He predicted that interest rates would remain high for two years as the government continues to wrangle inflation under control, and anyone able to wait out that period would be rewarded with another era of affordability.

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Due to that, he said buying is still the better long-term play, rather than shelling out for ever-increasing rent.

“There’ll be a time when we get back into the fours and fives, the refinance boom will happen,” he said. “People that are buying now at 7% interest rates, they can refi to a lower rate, or they can move and get the house they want because the price will be the same.”

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