Jan 12, 2023 - Real Estate

2023 will be challenging for Chicago homebuyers, experts say

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Illustration: Brendan Lynch/Axios

Local experts predict mortgage rates, which hover above 6%, will shape our real estate market in 2023, reports Axios' Sami Sparber.

  • Here's what they're saying:
There will be a resurgence toward city living

More favorable and level interest rates will help normalize the market, predicts Matt Silver, partner and senior broker with Corcoran Urban Real Estate.

  • If coupled with a steady return to offices and low COVID-19 levels, this could "spur the rebirth of the Loop," Silver tells Axios.
  • Those market shifts could boost sales volume and help stabilize prices, says Silver, president-elect of Illinois Realtors.
Conditions will test buyers

A lack of inventory, along with higher interest rates, could make the year challenging for homebuyers, predicts Rich Kasper, founder of The Kasper Group.

  • "Today's first-time buyers knew nothing of interest rates above 6 or 7%, so the shock of what that equates to on their monthly payment will need to be digested," Kasper tells Axios.

Meanwhile, homeowners who have locked in a favorable rate are reluctant to sell, Kasper says.

More first-time buyers will enter the market

Pent-up demand among first-time buyers will activate in the first quarter, predicts Tommy Choi, co-founder of Weinberg Choi Residential. A large group of future first-time buyers are still living with their parents, Choi says.

  • As these young professionals move into a hybrid or fully in-person work environment, Choi foresees them "jumping straight into homeownership."
  • That's because of rising downtown rental prices and "how much money this group has saved for a down payment by living at home," he tells Axios.

Yes, but: Chicago renters earned just 69% of the income they would need to afford a starter home, per October figures.


Get more local stories in your inbox with Axios Chicago.


Support local journalism by becoming a member.

Learn more

More Chicago stories

No stories could be found


Get a free daily digest of the most important news in your backyard with Axios Chicago.


Support local journalism by becoming a member.

Learn more