2023 Home Prices Could Post Their First Year-Over-Year Decline in a Decade
Mortgage rates are expected to remain elevated into 2023, and paired with high homeowner equity preventing would-be sellers from listing and relocating, the year ahead could see the slowest home sales in more than a decade, Redfin reports. Existing home sales are expected to fall 31% year-over-year in the first quarter of 2023, followed by smaller annual declines later in the year.
Redfin predicts that 30-year fixed mortgage rates will gradually decline to roughly 5.8% by the end of the year, and the median U.S. home-sale price is expected to drop by around 4% year-over-year to $368,000, marking the first annual drop since 2012. Still, lingering affordability challenges will keep buyer demand low nationwide.
Prices will start their decline in the first quarter, falling by roughly 2% from a year earlier, marking the first year-over-year drop since the beginning of 2012. Home-sale prices will likely fall by about 5% year over year in the second and third quarters, then ease to about a 3% drop by the end of the year as lower rates bring buyers back to the market.
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