Experts are always making predictions about the economy and how it will affect the cost of goods and services. While most prices rise due to inflation, there are a number of items that are expected to actually become more affordable.
As the economy recovers from the pandemic-induced recession, high unemployment can lead to decreased consumer spending. This in turn can lead to decreased demand for certain goods and services and as a result, lead to lower prices.
1. Real Estate
According to Forbes, Rick Sharga, executive vice president of market intelligence at ATTOM Data estimated a 5% drop in home prices nationally. The housing market is notoriously hard to predict and some areas could see price increases.
Today’s homeowners have more equity in their homes and less risky mortgages than in 2008, so a housing crash ala 2008 is less likely. Instead, economists predict a gradual cool down that leads towards market correction.
Of course, an overall lack of supply is the main variable that is keeping prices high. Unfortunately that low supply is unlikely to reverse any time soon.
Used vehicle prices have decreased after reaching peak prices in early 2022. They’re expected to continue to decrease in 2023, but not as much as people would like. Cars that are over four years old will decrease in price more than those that are one to three-years-old. The ongoing microchip shortage has led to the high prices of new cars, leading buyers to seek out used cars over the last two years. In 2023, experts think that new car prices will decrease by 5% or less, and used car prices will decrease by 10-20%.
Hot Tip: If you have a car that you want to sell, we recommend selling it before the cost decreases! Make the most of current prices.
Gas prices are expected to be lower in 2023 than in 2022. GasBuddy, a fuel-savings app, predicts that the lowest gas prices will be in February with an average of $2.99 per gallon of regular unleaded gasoline. However, prices may increase to $4 per gallon during the summer travel season. Recently gas prices have dropped from a high of $5 per gallon to around $3.06 per gallon, according to GasBuddy.
According to Fitch Solutions, a leading provider of credit market data and research, the price of wheat is expected to decrease in 2023. On December 1st, 2022, the company released its wheat price forecast for 2023, which predicts that the grain will trade at around $8.60 per bushel in 2023. This represents a decrease from the estimated price of $9.33 per bushel in 2022.
The Inflation Reduction Act will allow Medicare to negotiate lower prices for some prescription drugs in 2023. This means that people with Medicare coverage will pay less for some drugs. This includes insulin, which will have a cap of $35 per month for out-of-pocket expenses.
Moreover, adult vaccines for shingles and tetanus-diphtheria-whooping cough will have no out-of-pocket costs. The act also requires drug manufacturers to pay rebates to Medicare for drugs that increase in price more than inflation. This should help keep prices steady and prevent unexpectedly high costs for patients on Medicare.
Coffee lovers can look forward to some relief in their wallets as the cost of their beloved beverage is forecasted to stabilize this year. The retail prices of coffee beans, which have been fluctuating in recent years, are predicted to level off in 2023.
It’s worth noting that the prices could be affected by other factors as well, such as weather conditions and crop yields, which can impact the supply and demand of coffee beans.