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A 2023 Housing Recession Will Impact These Volatile Markets First

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Housing Markets

A 2023 Housing Recession Will Impact These Volatile Markets First

Home prices are rapidly correcting in a number of turbulent regional markets at the start of 2023. Here are the homebuying hotspots where prices are falling, and rising, the fastest

January 23, 2023
Aerial view of the city of San Jose, California
Image: Stock.adobe.com

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.

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