Revisions in 2023 Expert Home Price Predictions Signal Resilience in the Housing Market

Lisa Mailhot  |  September 5, 2023

Buyers

Revisions in 2023 Expert Home Price Predictions Signal Resilience in the Housing Market

 

Towards the conclusion of the previous year, numerous reports circulated, predicting a substantial decline in home prices for 2023. These forecasts ignited widespread concern and raised questions about the possibility of a housing market crash akin to the 2008 recession. However, it turns out that these headlines missed the mark.

Despite a slight correction in home prices following the meteoric rise during the 'unicorn' years, the national housing market did not experience a catastrophic collapse. In fact, home prices exhibited far more resilience than initially anticipated.

Let's delve into some expert predictions made late last year and compare them to their most recent projections, revealing that even the experts acknowledge their earlier pessimism.

Expert Forecasts for Home Prices: Then vs. Now

This visual representation showcases the 2023 home price forecasts from seven reputable organizations. It presents their original 2023 predictions, released in late 2022, regarding the expected direction of home prices by the end of the current year, along with their most recent revised forecasts (as depicted in the chart below):

As indicated by the red bars in the middle column, all initial forecasts foresaw a decline in home prices. However, a glance at the right column reveals that these experts have since adjusted their year-end projections to indicate either stable prices or positive growth. This marks a significant departure from their initial pessimistic outlook.

Several factors contribute to the resilience of home prices against a downturn. As articulated by Odeta Kushi, Deputy Chief Economist at First American:

“One thing is for sure, having long-term, fixed-rate debt in the U.S. protects homeowners from payment shock, acts as an inflation hedge - your primary household expense doesn't change when inflation rises - and is a reason why home prices in the U.S. are downside sticky.”

Anticipating Future Developments to Stay Informed

Expect misleading media coverage regarding home prices in the months ahead, primarily due to the seasonality of home price appreciation. The media is likely to misinterpret this pattern. Here's what you should be aware of to stay ahead of the next wave of negative headlines.

As the activity in the housing market naturally slows towards the end of the year (as is customary), home price growth will also decelerate. However, this should not be confused with a decline in prices; rather, it indicates that prices are not rising as swiftly as during the peak homebuying season.

In essence, a reduction in the rate of price appreciation should not be equated with a drop in home prices.

Bottom Line

Headlines can wield influence, even when they do not align with reality. Despite media claims that home prices would significantly decline at the close of the previous year, such an outcome did not materialize. Let's connect, so you can rely on a trustworthy resource to help you distinguish facts from fiction through dependable data.


RECENT BLOG POSTS

Why a HELOC Could Be Your Best Bet Going Into November

Learn why a home equity line of credit (HELOC) may be smarter than a home equity loan this November. With expected rate cuts, a HELOC offers flexibility, savings on re… Read more

Election Jitters: Why First-Time Homebuyers Are Playing the Waiting Game

Nearly 23% of first-time homebuyers are holding off on their home search until after the upcoming election, hoping the winner’s housing policies will work in their fav… Read more

Mobile Homes and Climate Risks: How Natural Disasters Highlight Vulnerabilities

Climate disasters expose severe risks for mobile home residents, with hurricanes Helene and Milton highlighting how vulnerable these homes are. Explore why mobile home… Read more

Clear Cooperation Controversy: Class Action Against NAR Gains Momentum

The American Real Estate Association is exploring a class action against the National Association of Realtors (NAR) over its Clear Cooperation Policy. Learn how this p… Read more

Brace Yourself: Student Loan Impact on Credit Starts in January 2025

Student loan borrowers, be prepared for significant changes in 2025 as credit reporting and collection activities resume. Learn what steps to take now to protect your … Read more

Fighting Housing Discrimination: The Reality of Section 8 Voucher Bias in California

An investigation uncovers rampant discrimination against Section 8 tenants in California, with many landlords denying rental contracts to voucher holders. Learn more a… Read more

Dealing with Liens on Your Home: What You Need to Know Before Selling

A lien on your property can halt a sale and create financial complications. Learn what a lien is, how to resolve it, and what options you have if it's incorrect. Under… Read more

Will the Clock Run Out for Low-Income Renters in States?

With 223,000 affordable housing units set to expire in the next five years, low-income families may soon face drastic rent hikes. Explore the challenges of preserving … Read more

Homebuyer Demand on the Rise Amid Stabilized Rates

As mortgage rates stabilize, homebuyers are showing renewed interest with a 9% increase in purchase loan applications year-over-year. Explore what this means for the h… Read more

We are excited to assist you in finding your perfect home

Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most