As the housing market cools in response to the dramatic rise
in mortgage rates, home price appreciation is cooling as well. And if you’re
following along with headlines in the media, you’re probably seeing a wide range
of opinions calling for everything from falling home prices to ongoing
appreciation. But what’s true? What’s most likely to happen moving forward?
While opinions differ, the most likely outcome is we’ll fall
somewhere in the middle of slight appreciation and slight depreciation. Here’s
a look at the latest expert projections so you have the best information
possible today.
What the Experts Are Saying About Home Prices Next Year
The graph below shows the most up-to-date forecasts from
five experts in the housing industry. These are the experts that have most
recently updated their projections based on current market trends:
As the graph shows, the three blue bars represent experts
calling for ongoing home price appreciation, just at a more moderate rate than
recent years. The red bars on the graph are experts calling for home price
depreciation.
While there isn’t a clear consensus, if you take the average
(shown in green) of all five of these forecasts, the most likely outcome is,
nationally, home price appreciation will be fairly flat next year.
What Does This Mean?
Basically, experts are divided on what’s ahead for 2023.
Home prices will likely depreciate slightly in some markets and will continue
to gain ground in others. It all depends on the conditions in your local
market, like how overheated that market was in recent years, current inventory
levels, buyer demand, and more.
The good news is home prices are expected to return to more
normal levels of appreciation rather quickly. The latest forecast from Wells
Fargo shows that, while they feel prices will fall in 2023, they think prices
will recover and net positive in 2024. That forecast calls for 3.1%
appreciation in 2024, which is a number much more in line with the long-term
average of 4% annual appreciation.
And the Home Price Expectation Survey (HPES) from
Pulsenomics, a poll of over one hundred industry experts, also calls for
ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show,
even if prices decline slightly next year, it’s not expected to be a lasting
trend.
As Jason Lewris, Co-Founder and Chief Data Officer for
Parcl, says:
“In the absence of trustworthy, up-to-date information,
real estate decisions are increasingly being driven by fear, uncertainty, and
doubt.”
Don’t let fear or uncertainty change your plans. If you’re
unsure about where prices are headed or how to make sense of what’s going on in
today’s housing market, reach out to a local real estate professional for the
guidance you need each step of the way.
Bottom Line
The housing market is shifting, and it’s a confusing place
right now. Let’s connect so you have a trusted real estate professional to help
you make confident and informed decisions about what’s happening in our market.
Source: Real Estate with Keeping Current Matters
