What will homebuyers need in 2023? Digital options and proactive advice

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Family interacting in the living room of their home

While the world holds its breath waiting for a possible recession, the housing market is still trying to regain its pre-pandemic footing amidst sky-rocketing prices and intense inflation.

According to Zillow, average monthly mortgage payments are a whopping 76% higher now than in June 2019. And this summer, the National Association of Realtors (NAR) reported that “existing-home sales were down 5.9% from June and 20.2% from one year ago, with all four major U.S. regions recording month-over-month and year-over-year declines.”

Because of this, “Affordability is the key concern right now in the housing market,” according to NAR’s Vice President of Demographics and Behavioral Insights Jessica Lautz. “Both home prices and mortgage rates have risen, shutting the door on many potential first-time buyers, who are having a difficult time” — which means it’s up to us to step in.

What can we do to help people navigate buying a home and getting adequate coverage at a time like this? As we head toward 2023, keep the following trends, insights and ideas in mind:

Plateauing prices and ongoing uncertainty

The economic turmoil of the past few years has created a volatile landscape, and “following June’s surge in mortgage rates and the resulting dampening effect on housing demand, price growth is taking a decisive turn,” says Selma Hepp, interim lead of the Office of the Chief Economist at CoreLogic.

“Even though annual price growth remains in double digits, the month-over-month decline suggests further deceleration on the horizon. The higher cost of homeownership has clearly eroded affordability, as inflation-adjusted monthly mortgage expenses are now even higher than they were at their former peak in 2006.”

The VIU Perspective

In a strained market, creating non-interest-rate sensitive levers to help achieve affordability is more important than ever. Insurance is one such lever, particularly with a solution that offers customers across all segments and geographies broad carrier choice, deep expertise and transparency like VIU by HUB.

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Stabilized mortgage rates and evolving buyer behavior

While many experts forecast a continued downturn within the housing market, Bankrate’s Chief Financial Analyst Greg McBride predicts that “aggressive Fed action and growing fears of recession will bring mortgage rates lower, with the average 30-year fixed falling to 5.25 percent and the average 15-year fixed to 4.35 percent by the end of September.

“Any evidence of inflation receding will help with lower mortgage rates, too,” he adds, while long-dwindling buyer demand and the change in seasons are set to trigger price reductions across the board that will surely stimulate sales – many of which may be conducted entirely online.

The VIU Perspective

Since the pandemic, more folks than ever are going fully digital when it comes to all kinds of purchases — even big ones like home and auto. And as the housing market starts to ramp up again, so should your online offering. One thing every home buyer needs is reliable homeowners insurance, and getting in front of your customer’s needs shows them you care and makes for good business. VIU by HUB offers an innovative user experience that delivers customized quotes in seconds and embeds right into your company’s existing ecosystem for one seamless and delightful customer journey.

Need an insurance partner that can help deliver timely solutions to customer challenges? Let’s find a time to talk.