Frustrated with the housing market? Housing experts say they expect the market to tip back to buyer’s rights by 2023, according to a new report.
Mortgage rates are approaching 7%, but home prices are falling only slowly and inventory remains tight compared to pre-pandemic levels.
Still, the U.S. housing market will shift in favor of homebuyers by the end of 2023, said 44% of 107 economists and housing experts polled by real estate company Zillow for its home price expectations survey.
And 12% of these experts believed that the shift will happen earlier – that is, this year.
Still, about 45% of experts surveyed by Zillow say buyers need to wait and expect the market to shift in buyers̵[ads1]7; favor in 2024 and beyond.
All respondents in the survey said they expected a slowdown in house prices in 2023.
“The US housing market will shift in favor of home buyers by the end of 2023. That is according to 44% of the 107 economists and housing experts surveyed by the real estate company Zillow.“
And we’ve already seen some signs of price pressure: 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 such as Boise, Austin and Raleigh; 77% of the experts surveyed expect a decline in these cities. They saw a huge jump in sales amid the earliest days of the coronavirus pandemic.
Redfin, another real estate brokerage, also noted that Sun Belt homebuyers are canceling their home purchase agreements at the highest rate 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 such as Columbus, Indianapolis and Minneapolis, Zillow said. Only 36% of respondents expected house prices to fall in these areas over the next 12 months.
Some markets in the South are also expected to see demand remain strong, including Atlanta, Nashville and Charlotte, respondents added. Only 44% said that a fall in house prices was likely.
But for any potential buyers stuck renting, as either mortgage rates or home prices make 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 homebuyer’s monthly mortgage payment for a home priced at the median asking price has risen $337 to $2,547 in the past six weeks alone, Redfin noted — a 15% jump.
It is also up 50% from a year ago, when rates were 3.01%.
Do you have thoughts about the housing market? Write to MarketWatch reporter Aarthi Swaminathan at firstname.lastname@example.org