The year 2022 saw the US enter into a recession, as property prices rose drastically as a result of inflation. The financial experts at IBRinfo.org have revealed their property inflation predictions for 2023 in Texas. They also identified two Texas cities as among the top 10 nationwide for diminishing purchasing power.
The financial website experts say before analyzing the data, it’s important to establish the relationship between inflation and property prices. Inflation refers to the rate at which purchasing power drops and prices for goods and services rise to the point that they are no longer affordable for the majority of people. This ultimately has a knock-on effect for the property market as house prices increase and mortgage interest rates climb in an attempt to bring inflation back down to more manageable levels.
Nationwide in 2022, home prices increased by over 6% compared to figures from 2021, according to Forbes. This led to far fewer homes being sold, as the majority of people are unable to afford these higher prices. This has resulted in the supply of homes for sale being far greater than the demand for homes to buy.
IBRinfo.org expects to see things remain relatively the same throughout 2023 as inflation is gradually reduced. Although the rate of inflation is being brought down slowly over time, there is unlikely to be any major financial relief to come to the housing market in the next year. Nationally, mortgage rates will remain almost twice as high as those in 2021, with the typical payment increasing to $2,430 – up 28% (Realtor.com). Across the U.S., home prices will rise another 5.4% in 2023 – with a few select areas seeing prices reduce from those in 2022.