It is undeniable that the COVID-19 pandemic created an unprecedented impact on the Connecticut housing market, leaving buyers and sellers unsure on what to do. To add to the mix, 2022 saw a 40-year high inflation and soaring interest rates, which notably impacted the housing market. Fortunately, as we enter 2023, the Connecticut housing market is beginning to take a turn.
Understanding the state of the Connecticut housing market will ensure you get the most out of your sale or purchase. When you decide to sell your home, you want to ensure that there is a demand for your property and you can sell it for a good price. If you don’t sell at the right time, you may find that it becomes a stressful and time-consuming process, and you may even lose money.
When you are looking to buy a new house, you want to ensure there are plenty of options for you to choose from, at a reasonable price.
Understanding the housing market in Connecticut 2023 is the best way to make an informed decision, and buy or sell your home with ease.
Here is some important information that will help you on your journey.
What to consider when looking at the state of the Connecticut housing market in 2023?
There are two main factors that you should keep an eye on when doing a Connecticut housing market forecast for 2023:
Mortgage interest rates
These two factors are expected to shape the Connecticut housing market in 2023. So, let’s talk more about them!
As mentioned earlier, the inventory shortage in 2021 was one of the main reasons that drove home prices up.
Since construction wasn’t happening, the homes that are available for sale on the market could barely keep up with the demand.
For this reason, the inventory continues to be an important part of any Connecticut housing market forecast in 2022.
Additionally, most foreclosures were put on pause in the past two years due to regulations related to COVID-19, which further added to the inventory problems.
As of January 2023, there were 2346 residential houses sold in Connecticut, with approximately 8525 homes for sale, with an average median days on the market of 52 days. February saw 8220 homes for sale. These numbers are lower in comparison to the same time last year, and across the United States in general inventory has fallen. However, the Connecticut market is beginning to see an uptick in demand in the first quarter of 2023, which may change the landscape for the remainder of the year. The median price of a house in Connecticut is $334,600, which has increased by 4.1% compared to last year.
Another factor that has shaped the market in previous the past two years is that mortgage interest rates had decreased, resulting in more people qualifying for a mortgage to buy a new home, driving the sales up. This was part of the COVID-19 mortgage relief program for real estate investors. However, mortgage interest rates rose significantly in 2022, completely disrupting the market and disqualifying a large number of people and removing them from the market as potential buyers.
Mortgage rates in Connecticut as of the beginning of 2023 have continued to increase, but more steadily than the year prior. As of March 2023, the current interest rates average at 5.97% for a 15-year mortgage (fixed) and 6.92% for a 30-year mortgage (fixed).
With all this in mind, the demand for properties has led to the average house price in Connecticut in 2023sitting at $334,600. However, this number will vary depending on which area you are looking to buy or sell in and whether it is a larger metro area, or a small-knit community. The biggest change in price is in Fairfield County, where the demand is high.
The following areas in particular, are predicted to see a small rise in house prices in mid 2023:
New Haven, CT
New London, CT
House prices have also been predicted to fall in the following areas in mid 2023:
With the housing market slowing down, obtaining a property may be in closer reach for many people who were denied this over the past couple of years. The housing market in Connecticut in 2023 is predicted to be much more active, stable and balanced, as it returns to some normalcy.
When you choose to buy or sell your home in Connecticut in 2023, it is vital that you do it at the right time. If you need additional support, contact our specialist team today for more help.