How 2023 Shaped Up for Buyers and Sellers

2023 was an interesting year for real estate. Post-pandemic challenges continued to plague the housing market and the economy, however a correction began to work its way through toward the end of the year. Looking at the bigger picture, just how did 2023 shape up for buyers and sellers?

Clever’s latest report takes a look at homebuying, home-selling and other housing market statistics from 2023.

The report found that despite the challenges of 2023, Americans remain surprisingly optimistic about achieving their goals in 2024. Nearly a quarter of millennials (23%) and zoomers (24%) say buying a home is a goal next year, but just 28% of Americans who wanted to buy a home in 2023 actually did.Key highlights:

About 83% of non-homeowners want to buy a house but can’t because of financial reasons. The top reasons are: They don’t have enough for a down payment (53%), homes are too expensive (43%), and interest rates are too high (36%).
Homes are out of reach for many Americans because home prices have risen more than 2x faster than income since 2000. Home values have soared 162%, while income has increased only 78%.
To afford a home today, Americans need an average income of roughly $166,600, but the median household income is just $74,580.
The average house-price-to-income ratio is 5.8, more than double the 2.6 experts recommend. None of the 50 most-populous metros have a home-price-to-income ratio that’s equal to or below the recommended 2.6. Pittsburgh has the lowest home-price-to-income ratio at 3.2, while San Jose has the highest at 12.1.
As home prices rise, Americans are paying more for less space. Since 1980, the median price per square foot for single-family homes has increased 368%—from $41 to $192. At $133 per sq ft, Cleveland is the least expensive city, while San Jose is the most expensive at $845 per sq ft.
The percentage of homeowners who said buying a home was more difficult than expected increased from 30% in 2022 to 44% in 2023 because of financial reasons, such as exceeding their budget (45%), high interest rates (42%), and expensive home prices (42%).
Nearly 3 in 4 Americans (73%) don’t think homes are affordable right now, but 60% continue to underestimate the median home price. Just 14% actually know the median price ranges between $400,000 and $499,999.
Although competition has eased nationwide, a surprising 38% of home buyers still paid more than the asking price for a home in 2023. However, 58% of recent buyers and 63% of first-time buyers admit they overpaid for their home.
Mortgage lenders recommend putting down 20% on a home, but 62% of Americans believe it’s a requirement. More than 1 in 5 Americans (21%) said home buyers actually need to put down more than 20%.
Nearly 2 in 3 recent buyers (61%) said searching for a home took longer than expected. Three-fourths of buyers (76%) searched for at least one month, while nearly half (47%) looked for at least three months. While house hunting, 95% of Americans made more than one offer.
40% of recent sellers said selling their home was more difficult than they expected—up from 31% in 2022. Unexpected difficulties inevitably led to more stress, with 56% saying the home-selling experience was stressful.
The percentage of homes that sold within one month decreased by half—from 55% in 2022 to 28% in 2023—indicating a cooling market.
More than half of home sellers (58%) said earning the most money from their home sale was very important, but 38% weren’t satisfied with the profit they made on their sale. A majority of sellers (57%) made less than $50,000 on their home sale, and 1 in 14 (7%) actually lost money or broke even.