Expert Home Price Forecasts for 2023 Revised Up
There were several articles near the close of last year claiming that property prices would decline significantly in 2023. This sparked widespread concern and speculation about the possibility of a repetition of the 2008 housing catastrophe. However, the headlines were incorrect.
While there was a minor home price adjustment following the sky-high price appreciation during the 'unicorn' years, home prices did not plummet nationally. Prices were far more resilient than many people anticipated.
Let's compare some of the experts' estimates from late last year to their most recent forecasts to see if even the experts admit they were unduly negative.
Expert Home Price Forecasts: Then and Now
This visual shows the 2023 home price forecasts from seven organizations. It provides the original 2023 forecasts (released in late 2022) for what would happen to home prices by the end of this year and their most recently revised 2023 forecasts (see chart below):
As the red in the middle column indicates, their initial projection projected for home prices to fall in all cases. However, if you check at the right column, you'll notice that all experts have changed their year-end estimates to show that they expect prices to be steady or to climb. That represents a big improvement from the initial negative figures.
“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.”
A Look Forward To Get Ahead of the Next Headlines
In the months ahead, you'll witness more inaccurate media coverage of property prices. This is because home price appreciation has seasonality, which they would misinterpret. Here's what you need to know to stay ahead of the next round of unfavorable news.
As housing activity slows at the end of the year (as it does every year), so will home prices. However, this does not imply that prices are declining; rather, they are not climbing as swiftly as they were during the market's peak homebuying season.
Basically, deceleration of appreciation is not the same thing as home prices depreciating.
Even if the headlines are false, they have an effect. While the media predicted that property prices would decline dramatically at the end of last year, this did not occur. Let's connect so you may have a dependable resource to help you discern fact from fantasy.