U.S. home prices fell 2.4% between June and October after sharp growth at the start of 2022, and though some economists saw that sudden slowdown as a clear indicator of a full-blown housing correction, Zillow’s most recent housing forecast points toward a more bullish market ahead. While Moody’s Analytics expects national home prices will fall 5.1% between the fourth quarter of 2022 and the fourth quarter of 2023, Zillow anticipates just a 1.1% price drop from November 2022 to November 2023, Fortune reports.
Of the 897 markets analyzed by Zillow, 658 are on track to see falling home prices in the year ahead, led by rapidly correcting regional markets such as San Jose, Calif., Grand Forks, N.D., and Odessa, Texas, which are projected to see declines of 7.2%, 6.7%, and 6.4%, respectively.
But substantial declines in mortgage rates [down to 6.15% as of Thursday]…and promising data showing a decline in inflation, all give grounds for cautious optimism that the worst is behind us when it comes to borrowing costs, and some of the deterred homebuying demand from this fall may return in the new year. That possibility, coupled with still-low inventory by historical standards, provides the basis for Zillow’s forecast continuing to rule out the possibility of double-digit price declines in 2023 for the nation as a whole," wrote Zillow economists in December.
Advertisement
Related Stories
Housing Markets
5 Housing Markets That Would See a Huge Increase in Homeownership if Mortgage Rates Dropped
Spokane, Wash., would experience an 11.4% increase in affordability if rates dropped to 6%
Housing Markets
Spring Housing Markets: Which Markets Saw the Most Appreciation, and Which Saw the Least?
Florida metros saw the weakest appreciation of all housing markets in the US
Business Management
How 2023's Housing Market Conditions Are Affecting the 2024 Market
Last year ended on an optimistic note, but persistent headwinds still exist to keep 2024 from getting the housing market back to pre-pandemic levels