For the past two years, home sellers have benefited from record home price appreciation and steady buyer demand, but as elevated borrowing costs chip away at what little competition remains, buyers are gaining an upper hand, Zillow reports.
Home value growth is slowing as rising mortgage rates push buyers to the sidelines, and with increased affordability and fewer competing offers, buyers are expected to regain bargaining power in 2023. That is, according to a majority of economists and housing experts polled in the latest Zillow Home Price Expectations Survey (ZHPE). Though all 107 survey respondents predict home price deceleration in 2023, metros in the South and Midwest are the least likely to see prices fall over the next year, but sellers will still be forced to offer concessions to attract buyers if interest rates continue to rise.
After the frantic rush for real estate over the past two years, prospective buyers are finally seeing a calmer market. Those still able to afford home ownership are quickly regaining lost leverage, but this shift to a more balanced market is still in its early stages. Home shoppers priced out of the market face further hurdles though, as high and rising rents could cut further into their ability to save up for a down payment.
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