In the past 12 months, many aspiring home owners saw a U.S. residential real estate market that proved challenging. Countless buyers were squeezed out of the market as mortgage rates climbed rapidly throughout the year.
The rise in interest rates, coupled with limited housing supply, made things especially difficult for first-time buyers. According to the National Association of REALTORS®’ (“NAR”) 2022 Profile of Home Buyers and Sellers, the share of first-time home buyers dropped to a record low of 26%, down from 34% in 2021 and a peak of 50% in 2010 when there was a First-Time Home Buyer Tax Credit and considerably more inventory.
First-time buyers are also getting older. The typical first-time buyer is now 36 years old – up from 33 one year ago. Many factors contribute to these trends, such as saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel many into homeownership.
Despite the challenges faced by first-time home buyers, the desire to own a home remains strong. For many, home ownership is seen as an essential part of the American dream; a symbol of success and stability. And countless families are willing to make sacrifices to achieve this goal.
So, what’s in store for 2023?
There are promising signs that the market is starting to stabilize and 2023 may be more favorable for buyers. Mortgage rates appear to have peaked and have been coming down since mid-November 2022. We expect that prices will remain steady this year for most of the country, with some markets seeing a slight rise and others slightly declining. With mortgage rates coming down and prices stabilizing, many who were previously squeezed out may now be able to enter the market and become active buyers.
In 2023, NAR will take to the road with an exciting, new campaign called Riding with the Brand. This nationwide, multi-stop motor coach tour has events planned in conjunction with Realtor® associations in every state.
We aim to engage thousands of members across the country by visiting face-to-face and sharing the importance of member engagement, community engagement, and the Realtor® brand. The brand is us and we all bring something to the brand.
This initiative celebrates the fearless passion and relentless drive that our members bring to their work. Across the nation, Realtors® – who are members of the National Association of Realtors® – are united by a desire to promote homeownership while abiding by a commitment to a strict Code of Ethics. Riding with the Brand celebrates what it means to be Realtor® strong – our members’ deep community connections, trusted relationships, volunteer spirit, a commitment to excellence and relentless defense of property rights.
We are excited about the opportunities and challenges the new year will bring, and we are committed to working tirelessly on behalf of our members. Together, we will continue to promote the value and importance of homeownership, and support policies that protect the rights of property owners.
As we embark on this journey, we invite you to join us on the road and to be a part of the Riding with the Brand tour. Let’s celebrate the strength of the real estate market and the integral role Realtors® play in supporting the American dream.
By Kenny Parcell is the 2023 president of the National Association of REALTORS®.