Experts say home prices could plummet by 20% next year — here’s how to take advantage of it.

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Good news, get ready to reap the benefits.

Key Point

• House prices are very high today, but that could change in 2023.
• Increase your credit score and down payment so you can buy as soon as the price drops.
• Pay off as much debt as possible before taking out a mortgage.

There’s a reason so many potential homebuyers are struggling in today’s housing market. Not only are home prices still rising, but mortgage rates have skyrocketed since the beginning of the year, forcing homebuyers to spend even more to finance their home purchases.

But while we don’t know what mortgage rates will look like in 2023, some experts believe we could get some reprieve in terms of home prices based on recent trends. Ian Shepherdson, chief economist at Macroeconomics, believes house prices could fall as much as 20% in 2023.

Of course, you’ll want to put yourself in the best position possible to make the most of the opportunity. Method is as follows.

1. Improve your credit score

A higher credit score may make you appear more trustworthy as a mortgage borrower. So if you can use lift in your score, now is a good time to do that work. A higher credit score not only increases your chances of getting a mortgage approved, but it can also mean a more competitive borrowing rate for that loan.

One of the best ways to improve your credit score is to pay all your bills on time. You should also check your credit report for errors and correct any errors (such as delinquent debts that didn’t belong to you) that may paint a bad picture of your credit history.

2. Reduce the burden of debt

The more debt you owe to your income, the more likely the mortgage lender will be reluctant to approve your application. And the best place to start is usually your credit card balance. Not only are interest rates likely to be the highest, but paying off credit card debt can improve your credit score (paying off personal loans may be a good thing, but not necessarily credit The score does not always go up) ).

3. Increase your down payment

In 2023, house prices could drop significantly.

Inflation is currently making it difficult for many people to increase their savings. But if you can cut back on some expenses and generate more money to buy a home, buying next year could be easier.

And if you can’t cut your spending, consider a side hustle. With the gig economy booming these days, there are plenty of opportunities to find a side job.

A big drop in home prices could be great for buyers. Especially for those who have been trying to navigate the housing market for months without success. But putting yourself in a prime position to jump on these falling house prices pays off. Aim to improve your credit, reduce your debt and squeeze out more money to build a house.