As we enter 2023, housing experts maintain a watchful eye on the economy, which is still being pulled in all directions by high inflation, steep interest rates, ongoing geopolitical uncertainties and recession fears, to name a few.

After a couple of red-hot years for the housing market, there are indicators a correction is underway—but it’s been slow-going. Mortgage rates are still hovering around double what they were a year ago. And nationwide home prices are still increasing on a monthly basis despite a decline in total sales. This continues to make it harder for many homebuyers to access affordable housing.

The median existing-home sales price was up 3.5% to $370,700 in November compared to a year ago, according to the National Association of Realtors (NAR). It was the 129th consecutive month of YOY price increases—a record streak—even though home prices have fallen from their record high of $413,800 in June.

Still, higher housing costs have taken a toll on home shoppers as mortgage applications are at their lowest level in over 25 years, according to the Mortgage Bankers Association (MBA).

And the total existing-home sales dropped 7.7% from October to November, marking the tenth consecutive month of declining sales, and down 35% from a year ago.

Because of this, some experts say the housing market has reached its bottom already.

“It seems we have already reached the bottom of the low home sales activity,” says Nadia Evangelou, senior economist and director of forecasting for the NAR. “And with mortgage rates stabilizing near 6%, we expect the housing market to turn around in 2023. . .and rebound in 2024.”