Why economists predict home prices will fall in 2023

from a very high place inflation best ever Mortgage interest rate 7%it’s been a tough year for prospective homebuyers. understanding this housing marketHowever Especially in recent months, experts have speculated whether the housing market is showing ominous signs of a crisis like 2008. some people are now saying They expect housing prices to “collapse” soon. Here’s why some expert is making this prediction and what falling home prices mean for you in his 2023.

Current state of the housing market

Simply put, the housing market is in low demand from homebuyers. Instead, there is a growing demand for rentals. more affluent families Choose to rent instead of buy. There are also few affordable units on the market and inventory issues. And as long as there is little demand from buyers, there is little hope of building new (potentially affordable) units. have fewer buyers.

Home sales fell as a result last 9 monthsAccording to a report in . Axios When forbes, housing experts predict home prices will continue to fall into the new year. Industry leaders such as Goldman Sachs recently forecast 5% to 10% mortgages as high mortgage rates and slowing sales hit the market. falling housing prices Between now and March 2024.

What Falling Home Prices Mean for You

Home prices soared during the pandemic, and many potential homeowners were devalued from the market at the time. goldman sachs They say you shouldn’t expect home values ​​to fall to pre-pandemic levels. You may also have seen that mortgage rates have fallen in the last few weeks. Axiosis not low enough to significantly affect demand.

The most important thing for now is Forbes explains that These forecasts don’t necessarily point to a 2008-like crash. The main reason for this is that unemployment remains low and many existing homeowners still benefit from locking down their homes. Lowest rate in recent years. This means that a surge of defaults (like the 2008 crash) is unlikely.

Bottom line: Experts predict home prices will fall, but the market as a whole will not be a disaster. It’s important to keep in mind that this is all speculation after all. Experts have been wrong so far.