--- title: 'Housing Market Will Cool in 2023 as Mortgage Costs Soar: Expert Forecast' description: In a new housing market forecast for 2023, experts predict that home price growth will slow while mortgage rates will rise slightly higher. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2022-12-01T20:09:13.000Z' modified: '2024-01-10T14:27:47.000Z' section: Housing tags: - home prices - News word_count: 387 canonical: https://money.com/home-prices-mortgage-rates-forecast-2023/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Collage Illustration of a house being looked at closely by a giant magnifying glass](https://img.money.com/2022/12/News-Where-home-prices-heading-2023.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85) After two wild years in the housing market, experts say home price growth will fall back to earth in 2023 — but that doesn’t mean houses will be more affordable. In fact, the typical monthly mortgage payment on a home purchased next year could be more than $500 higher than in 2022. In a new 2023 [housing market forecast](https://www.realtor.com/research/2023-national-housing-forecast/), Realtor.com chief economist Danielle Hale predicts that home prices will rise by 5.4% next year. That’s a big slowdown from the roughly 10% growth in prices this year and the eye-watering 17% price growth in 2021. It would also be lower than the 6.4% average annual price growth between 2013 and 2019. But slower price growth overall doesn’t mean that homebuyers should expect bargains. The uptick in prices in the coming months may be modest, but potential buyers should prepare themselves for the extra costs associated with rising [mortgage rates](https://money.com/current-mortgage-rates/). Hale expects mortgage rates to average 7.4% next year, which is even higher than their peak of around 7.08% (for a 30-year, fixed rate loan) earlier this fall. (At the beginning of 2022, rates were about 3.22%.) Mortgage rates that high will mean that the typical monthly mortgage payment will reach $2,430 for a home purchased in 2023, according to Realtor.com's forecast. That would be a 28% bump over the typical payment this year — and *twice as high* as the typical payment in 2021. Earlier this month, the real estate brokerage Redfin calculated that a buyer needed to [earn more than $100,000 annually](https://money.com/six-figure-income-needed-to-afford-home/) in order to afford the monthly mortgage payment on a typically priced home (assuming that the buyer wanted to spend no more than 30% of their income on housing). A year earlier, buyers only needed to earn $75,659 to afford a typically priced home. It’s a safe bet that as mortgage rates and home prices continue to rise, potential buyers will continue to struggle. “Affordability is going to be the biggest factor in housing for 2023,” ​​Zillow chief economist Skylar Olsen said in a [news release](https://zillow.mediaroom.com/2022-12-01-Zillows-hot-housing-takes-for-2023) on Thursday, “but there’s room for optimism on that front if mortgage rates recede.” [9 Best Home Equity Loans of 2022](https://money.com/best-home-equity-loans/) [Home Prices Fell for the Third Month in a Row](https://money.com/home-price-index-fell-third-month/) [10 Cities Attracting the Most Out-of-Town Homebuyers](https://money.com/cities-attracting-out-of-town-homebuyers/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/home-prices-mortgage-rates-forecast-2023/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Housing", "item": "https://money.com/housing/" }, { "@type": "ListItem", "position": 3, "name": "Home Prices", "item": "https://money.com/home-prices/" }, { "@type": "ListItem", "position": 4, "name": "Housing Market Will Cool in 2023 as Mortgage Costs Soar: Expert Forecast" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/home-prices-mortgage-rates-forecast-2023/#webpage", "url": "https://money.com/home-prices-mortgage-rates-forecast-2023/", "name": "Housing Market Will Cool in 2023 as Mortgage Costs Soar: Expert Forecast", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-12-01T20:09:13.000Z", "mainEntity": { "@id": "https://money.com/home-prices-mortgage-rates-forecast-2023/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/home-prices-mortgage-rates-forecast-2023/#breadcrumb" }, "dateModified": "2024-01-10T14:27:47.000Z" }, { "@type": "NewsArticle", "headline": "Housing Market Will Cool in 2023 as Mortgage Costs Soar: Expert Forecast", "articleSection": "Housing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/12/News-Where-home-prices-heading-2023.jpg?crop=0px%2C166px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Where-home-prices-heading-2023" } ], "author": [ { "@type": "Person", "name": "Sarah Hansen", "url": "https://money.com/author/sarah-hansen/", "@id": "https://money.com/author/sarah-hansen/#author", "description": "Sarah Hansen is a senior writer at Money covering all things personal finance. 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