Written by Aly J. Yale and edited by Samantha Sharf
The housing market has been kind to homeowners these last few years. The average home value has jumped 43% since late 2019, and sellers have raked in eye-popping profits because of it.
But that was then.
As we head in 2023, the market looks very different. With mortgage rates more than double their year-ago level, buyers are pulling back. Home sales have slowed 6% compared to last year, and prices have already started to fall (at least monthly).
“Most forecasts are now calling for a decline in home prices next year,” says Kenon Chen, executive vice president of corporate strategy at Clear Capital, a real estate data and technology provider.
To be clear: Some economists expect prices to only plateau or rise very modestly in 2023. A number of others, as Chen notes, predict a notable drop — particularly in pandemic-era hotspots. Moody’s Analytics, for example, expects a 10% decrease in nationwide home prices. By other accounts, the drop could top 20%.
What exactly would those lower prices — and the home values tied to them — mean for current homeowners? That depends.