Frustrated with the real estate market? Housing experts say they expect the market to be back in buyers’ court by 2023, according to a new report.
Mortgage rates are approaching 7%, but house prices are only slowly coming back down and inventories are still tight from 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 surveyed by real estate firm Zillow for its house price expectations survey. .
And 12% of these experts believed that this change would happen sooner, i.e. this year.
Still, around 45% of experts surveyed by Zillow say buyers will have to wait and expect the market to change in their favor in 2024 and beyond.
All survey respondents said they expected house prices to decelerate in 2023.
“The U.S. real estate market will shift in favor of homebuyers by the end of 2023. That’s according to 44% of 107 economists and housing experts surveyed by real estate firm Zillow.”
And we’ve already seen signs of pricing pressure play out: The median price of an existing home in the United States was $389,500 in August, up from $403,800 the previous month, the National Association of Realtors said. .
Most housing experts surveyed by Zillow noted that the markets most likely to see lower home prices over the next year include pandemic boom cities like Boise, Austin and Raleigh; 77% of surveyed experts expect declines in these cities. They saw a huge increase in sales during the early days of the coronavirus pandemic.
Redfin, another real estate brokerage, also noted that Sun Belt home buyers are canceling their home purchase contracts at the highest rate compared to the rest of the country.
“Most housing experts surveyed by Zillow noted that the markets most likely to see lower home prices over the next year include pandemic boom cities like Boise, Austin and Raleigh.”
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 fall in these areas over the next 12 months.
Some southern markets should also see sustained demand, including Atlanta, Nashville and Charlotte, respondents added. Only 44% said house price declines were likely.
But for any potential buyers stuck in renting because 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.
A typical homebuyer’s monthly mortgage payment for a home at the median asking price has jumped from $337 to $2,547 in the past six weeks alone, Redfin noted — a jump of 15%.
It’s also up 50% from a year ago, when rates were at 3.01%.
Do you have ideas on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]
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