Is Waiting Until 2023 to Buy a Home a Dangerous Move?

The quick answer? Not necessarily.

Now that December has kicked off, you may be busy doing your last-minute shopping for the holidays and making plans to see family at the end of the month. But if you're in the market for a new home, you might also be spending hours looking at houses, reviewing listings, and chatting with your real estate agent over the phone.

Of course, December is by no means an easy month to buy a home. It tends to be a busy period due to the holidays, and you may have other year-end items you need to focus on.

But will you lose out financially if you wait until 2023 to buy a home? At this point, not necessarily. In fact, if anything, waiting until the new year to purchase a home could work to your advantage.

Why it could pay to wait

Right now, home buyers have a lot of things working against them. Housing prices are still high, real estate inventory is still limited, and mortgage rates are the highest they've been in several decades.

If you wait until 2023 to buy a home, these factors may or may not improve. But they're unlikely to get much worse.

Sure, mortgage rates could rise a little in 2023. But they're unlikely to climb at the same pace they did in 2022. Meanwhile, home prices could stay high. But if inventory picks up, that should help bring real estate prices down.

We don't know what direction inventory is going to go in. It's not very likely that inventory will dip dramatically (though new construction could slow down, which might lead to a drop in total inventory). And if anything, it might pick up, simply because there's so much room for that to happen. So all told, buying a home in 2023 isn't necessarily a poor choice compared to buying one now.

How to prepare to buy a home in 2023

You may decide to put off your home buying plans until the new year and take that stress off your plate so you can enjoy the holidays. But it's also important to tread carefully this month so you end up in a strong position to make a home purchase once 2023 kicks off. 

To that end, try not to go overboard on holiday spending. If you rack up a huge balance on your credit cards you then carry forward, it could take your credit score down. And the lower that number, the harder it is to get a mortgage -- or snag an affordable interest rate on one.

At the same time, it pays to check your credit report at the end of the year. That way, you can address red flags prior to putting in a mortgage application.

Waiting until 2023 to buy a home could mean facing higher mortgage rates and home prices, and even less inventory. But that's not so likely. So if you don't manage to become a homeowner by the end of 2022, don't sweat it. Instead, do what you can to set yourself up for success in the new year.