Something big is happening in the U.S. housing market—here’s where 27 leading research firms think it’ll take home prices in 2023 – Fortune
The U.S. housing market is no exception. The streak of 124 consecutive months of positive home price growth, a period spanning from the bottom of the previous bust in February 2012 to the top of the Pandemic Housing Boom in June 2022, has been replaced by a new streak: four consecutive months of U.S. home price declines.
Between June and October 2022, U.S. home prices as measured by the Case-Shiller National Home Price Index fell 2.4%. On the one hand, that’s already big enough to count as the second-biggest home price correction of the post-WWII era. On the other, it’s mild compared to the once-in-a-lifetime 26% correction that occurred between 2007 and 2012.
Back in May 2022, Fortune told readers that “something big” was happening in the U.S. housing market as spiked mortgage rates would soon send housing activity plunging. Once again, we would say something big is happening, to describe a U.S. housing market that has clearly slipped into deflation mode.
The question heading forward is just how much of the Pandemic Housing Boom’s historic 41%-plus jump in U.S. home prices—which has slipped to 38% as of October 2022—will get erased?
To get a better idea of what’s coming for national home prices in 2023, Fortune tracked down the latest housing forecasts from 27 of the nation’s leading housing researchers. Of that group, four expect U.S. home prices to grow in 2023, while the other 23 believe U.S. home prices have further to fall.
Below we present those 27 home price predictions—they’re ordered from most bullish to most bearish.
Realtor.com: The economics team at Realtor.com predicts that the median price of existing homes will rise 5.4% in 2023 while mortgage rates average 7.4%. “The slowdown in home sales transactions that began as mortgage rates surged in 2022 is expected to continue, leading to a moderation in home price growth and tipping housing market balance away from sellers,” write researchers at Realtor.com.
Home.LLC: The firm predicts U.S. home prices to rise 4% in 2023.
CoreLogic: The real-estate data firm predicts that U.S. home prices will rise 2.8% between November 2022 and November 2023. (Here is CoreLogic’s latest risk assessment for the nation’s 392 largest regional housing markets.)
NAR: The trade group projects that existing home prices are poised to rise 1.2% in 2023 while mortgage rates will average 6.3%.
Freddie Mac: The firm’s forecast model has U.S. home prices falling 0.2% in 2023 while mortgage rates average 6.4%. “We expect house prices to decline modestly, but the downside risks are elevated,” write Freddie Mac economists.
Mortgage Bankers Association: …….