If there’s one thing I know for sure about the current Frisco TX real estate market, it’s that people are confused about where the housing market is heading.

Is now a good time to buy?

Should you wait for mortgage rates to come down?

Are home prices going to fall further?

These are just a few of the questions I have been asked over the last few weeks.

Continue reading below, or watch the following video, to learn more about what the latest data is telling us about what to expect in the Frisco and Prosper real estate markets in 2023;

If you’re one of those people confused about where the housing market might be heading don’t worry, you’re not alone!

Even the experts don’t seem to be able to agree. For every report I see talking about the real estate market heading one way, I see another predicting the opposite way.

I certainly don’t pretend to have all the answers as my crystal ball is just as foggy as everyone else’s, but I can tell you the real-time data isn’t necessarily lining up with what is being widely reported in the national media.

The reason is that real estate is ultimately local. What’s happening here in Frisco is different than in Phoenix, Boise, Philadelphia, and Miami. While the states/cities, that saw the most appreciation during the pandemic boom have seen the largest price declines, much of the northeast and upper midwest haven’t seen any price declines.

The two things potential buyers are most concerned about when trying to make the buy or wait decision are mortgage rates and home prices.

Mortgage Rates

When mortgage rates shot up last year home buying activity slowed substantially as purchasing power declined.

Mortgage rates peaked in September and have been trending downward ever since. Inflation is the enemy of long-term mortgage rates. As the inflation number declines we should expect mortgage rates to as well.

Sam Khater, Chief Economist at Freddie Mac shares;

“While mortgage activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

While that’s great news for potential buyers, and there has already been an increase in new mortgage applications, if you’re waiting for rates to get down into the 3’s again, you might be waiting a long time as I believe those days are behind us.

Bankrate is expecting mortgage rates to end this year between 5% and 5.25%, with many experts predicting mortgage rates will eventually settle at between 4.5% and 5%.

There are a number of different loan programs and options available to make your dream of homeownership a reality. If you haven’t done so already, my advice would be to connect with a lender who can help you navigate those options to make sure you have a clear understanding of the financial side of buying a home.

Home Prices

While there has been widespread speculation about a housing market crash, there continues to be no data to suggest one is on the horizon and the leading indicators show that home prices will remain resilient through the busy spring season.

As mentioned above, what happens with home prices will largely depend on where you live. Here is Frisco and Prosper we saw the median home price fall last summer, down 17% in Frisco and 14% in Prosper, but since September home prices have remained stable.

One reason many speculated home prices would crash is due to a rapid increase in supply as buyer demand declined in the face of rising mortgage rates. That didn’t happen as sellers who didn’t have to sell simply took their homes off the market.

We are starting to see more supply come to market now, but that is normal this time of the year.

Local new home builders are quickly selling existing inventory, and receiving multiple offers in some cases, with yet-to-be-built homes taking between 10 and 14 months to deliver from contract to close.

Over the past couple of weeks, I can tell you that buyer activity has been strong. The number of people searching for homes on my website has increased and traffic at new builder sales offices has been busy.

I personally believe home prices in Frisco and Prosper will remain relatively flat this year based on the information currently available and based on the uncertainty surrounding the economy overall.

We will know more over the next few weeks as the housing market should come out of its normal winter slumber.

The best way to keep up to date on our local housing market is with my weekly market report. My weekly market report tracks all activity in real-time so you can spot emerging trends long before they are reported in the media. From my Frisco Market Report, you can use the search feature to look up the latest date for any city/zip code of interest to you.

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