Affordability is still the major question on the minds of homeowners and aspiring buyers alike in 2023.

Incomes, mortgage rates, and home prices will make or break hopeful homebuyer plans, concludes the annual housing forecast from Realtor.com, the online magazine of the National Association of Realtors (NAR).

Higher mortgage rates are cutting into purchasing power, raising the predicted average monthly payment on a new purchase to more than $2,430 in 2023.

This would be a 28% increase over the mortgage payment in 2022 and double the typical payment for buyers in 2021. Higher costs will lead to fewer closings in 2023, and challenge both buyers and sellers. But most analysts believe it will set the stage for home sales to eventually return to a sustainable pace over the next two to three years.

There are some buyer advantages in 2023. Forecasters predict more homes for sale, and less competition. Certain shopping trends are giving this year's shoppers more affordability control.

With more flexibility provided by remote or hybrid job schedules, many home buyers are able to look at homes in the suburbs and exurbs, where properties tend to be less expensive.

But the most important part of home shopping in 2023 is preparation. While time on market is expected to increase in 2023 amid less competition, well-priced homes in highly desirable markets are still going to sell quickly.

With a pre-approval letter from Bay Equity Home Loans, prospective homeowners will be ready to move when a home that meets their needs and budget hits the market.

A Bay Equity loan officer guides buyers through the collection of important financial information ahead of time; including bank statements, pay stubs, W-2s and other documents. A pre-approval document sets reasonable limits on monthly payments, and lets sellers know offers are serious.

Another potential positive for 2023 buyers is more balance. Statistics show sellers are more likely to accept offers below asking, as well as agree to buyer-friendly concessions.

If you are a seller, reasonable expectations are key. Pricing a home too high at the start tends to make it harder to sell. Many serious buyers get turned off by inflated prices and may not come back when the price inevitably gets reduced.

A wildcard for inventory growth is seller sentiment and activity. In fall 2022, seller sentiment declined sharply as soaring mortgage rates reduced their future options as buyers.