U.S. house prices to record first year-on-year decline in 10 years in 2023: experts

Sharp freeze in US housing market likely to accelerate next year, first year-over-year falling housing prices According to experts at real estate firm Redfin:

According to Redfin’s next year forecast, the median U.S. home sales price is expected to fall 4% to $368,000 in 2023. This is the first time house prices have fallen since 2012.

The decline in prices will begin during the first quarter as owners closed deals on homes under contract at the end of the year, said deputy chief economist Taylor Maher. said in a blog post. Home prices have already started to fall month-on-month in many markets.

“If there were no shortage of homes for sale, prices would fall further,” Ma said. “We expect new listings to continue to decline through most of next year, keeping total inventories at historically low levels and preventing a sharp drop in prices.”

Home prices are expected to fall most sharply in the so-called “pandemic boomtowns” that have lured buyers in 2020 and 2021. The most endangered cities include Austin, Texas. Boise, Idaho. and Phoenix, Arizona.

On the other hand, the Midwest and Northeast housing markets are likely to hold their prices next year.

This year’s surge in mortgage rates has sparked an affordability crisis, exacerbating the financial pain for prospective buyers already facing skyrocketing home prices and crushing inflation.

Deteriorating conditions began to crush buyer demand later this year, causing desperate sellers to cut their asking prices. Or pull the list completely.

The decline in sales volume is expected to continue next year. Existing home sales in 2023 are expected to fall 16% to 4.3 million units compared to this year.

Ma said the slowdown in sales “due to affordability issues, including high mortgage rates, still-high house prices, persistent inflation and a potential recession.”

“People move only when necessary,” added Ma.

As the year progresses, homeowners may get some relief in the form of lower mortgage rates. Redfin expects 30-year fixed mortgage rates to fall to an average of 5.8% by the end of next year after surging above 7% this year.

“When mortgage rates drop from about 6.5% to 5.8%, a homebuyer buying a $400,000 home will save about $150 in monthly mortgage payments,” said Marr. .

Federal Reserve Chairman Jerome Powell has called the current situation in the housing market a “bubble,” and the situation is causing growing anxiety among Americans.

According to a recent survey by LendingTree, 41% of Americans Housing market crash expected Within the next 12 months.