“Revisiting Home Price Forecasts: Experts Adjust Upward for 2023

As the curtains closed on the previous year

Headlines were awash with predictions of a substantial decline in home prices for 2023. These forecasts ignited concerns, triggering questions about the possibility of a housing market crash reminiscent of the tumultuous events of 2008. However, as it turns out, those headlines missed the mark.

While there was indeed a modest correction in home prices following the unprecedented price appreciation during what some might call the ‘unicorn’ years, it’s important to note that on a national scale, home prices did not come crashing down. In fact, they demonstrated a surprising level of resilience, surpassing many people’s expectations.

Expert Home Price Forecasts: Then and Now

Let’s embark on a journey to compare the home price predictions made by experts late last year with their most recent revisions. In the visual representation below, you can see the 2023 home price forecasts from seven reputable organizations. It contrasts their original 2023 forecasts, released in late 2022, with their current predictions for the year’s end.

In the middle column marked in red, you’ll notice that initially, all experts projected a decline in home prices. However, shift your gaze to the right column, and you’ll see that every one of these experts has updated their year-end projections to indicate either price stability or positive growth. This marks a significant departure from their original bearish outlook.

Several factors contribute to the resilience of home prices. As Odeta Kushi, Deputy Chief Economist at First American, points out:

“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge – your primary household expense doesn’t change when inflation rises – and is a reason why home prices in the U.S. are downside sticky.”

Looking Forward: Understanding Seasonality

As we journey into the coming months, you can expect to encounter more media coverage that may be misleading. This is because there is a natural seasonality to home price appreciation, and some may misinterpret this phenomenon. Here’s what you need to know to stay ahead of the next wave of negative headlines.

Towards the end of this year, as is customary, activity in the housing market will slow down. Correspondingly, home price growth will decelerate. It’s essential to understand that this deceleration in appreciation is not equivalent to home prices depreciating. It merely indicates that prices are not increasing as rapidly as during the peak homebuying season.

In Conclusion

Headlines hold sway, even when they don’t align with reality. Despite the media’s predictions of significant home price declines at the close of the previous year, this scenario did not unfold. It’s crucial to have a trusted resource to help you separate fact from fiction with reliable data.

Don’t let misleading headlines shape your decisions. Reach out to us today for insights grounded in market trends and data. Explore the current housing market with confidence and stay informed about the dynamic landscape of real estate.