Frustrated by the housing market? Housing experts say they’re expecting the market to tip back into buyers’ court by 2023, according to a new report.
Mortgage rates are approaching 7%, but home prices are only slowly coming back down and inventory is still tight compared to pre-pandemic levels.
Still, the U.S. housing market will shift in favor of home buyers by the end of 2023, 44% of 107 economists and housing experts polled by real-estate company Zillow for its Home Price Expectations Survey said.
And 12% of these experts believed that shift will happen sooner — that is, this year.
Yet roughly 45% of experts surveyed by Zillow say buyers will have to wait, and expect the market to shift in buyers’ favor in 2024, and beyond.
All survey respondents said to expect home-price deceleration in 2023.
“The U.S. housing market will shift in favor of home buyers by the end of 2023. That’s according to 44% of the 107 economists and housing experts surveyed by real-estate company Zillow.”
And we’ve already seen some signs of price pressures manifesting: The median price of an existing home in the U.S. was $389,500 in August, down from $403,800 the previous month, the National Association of Realtors said.
Most of the housing experts surveyed by Zillow noted that the markets most likely to see home prices decline over the next year include pandemic boomtowns like Boise, Austin, and Raleigh; 77% of the experts surveyed expect declines in those cities. They saw a huge jump in sales amid the earliest days of the coronavirus pandemic.
Redfin, another real-estate brokerage company, also noted that Sun Belt home buyers are cancelling their home-purchase agreements at the highest rate as compared to the rest of the nation.
“Most of the housing experts surveyed by Zillow noted that the markets most likely to see home prices decline over the next year include pandemic boomtowns like Boise, Austin, and Raleigh.”
The markets least likely to see home prices decline over the next year include Midwestern cities like Columbus, Indianapolis, and Minneapolis, Zillow said. Only 36% of respondents expected home prices to decline in these areas over the next 12 months.
Some markets in the south are also expected to see demand hold strong, including Atlanta, Nashville, and Charlotte, the respondents added. Only 44% said declines in home prices were likely.
But for all potential buyers stuck renting as either mortgage rates or home prices makes buying a home unaffordable right now, expect rent growth to continue, Zillow said.
Zillow also expects rent growth to outpace inflation, stocks, and home values, over the next 12 months.
The typical home buyer’s monthly mortgage payment for a home priced at the median asking price has climbed $337 to $2,547 in the past six weeks alone, Redfin noted — a 15% jump.
That’s also up 50% from a year ago, when rates were at 3.01%.
Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]