Experts are starting to make 2023 predictions for the 2023 housing market. Most agree homes will continue to gain value, just at a slower pace. Over the past couple of years, home prices have risen at an unsustainable rate, leaving many to wonder how long they will last. If you’re asking yourself: what’s in store for the housing market, know that experts are now answering this question, and it’s welcome news for homeowners who the media may have led to believe their house would lose value.
Historically, home prices have appreciated at a rate near 4%. For 2023, the average of six major forecasters noted below is 2.5%. While one, Zelman & Associates, is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where the housing market is going in the coming year.
To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert, says this:
“The root issue of what drives house prices almost always is supply and demand . . .”
Two things are driving home prices upward. First, the undersupply of homes on the market is an issue we continue to face in this country. We still don’t have enough homes on the market for the number of people that want to buy them. To further that point, we’re still in a sellers’ market nationally, and in that scenario, house prices tend to appreciate.
Second, millennials are moving through their peak home buying years. Since they’re the largest demographic behind the baby boomers, demand isn’t going away any time soon.
Bottom Line
Experts are calling for the housing market to increase and home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple. The dynamics of supply and demand are playing out in real estate and will continue for many years to come.
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By Keeping Current Matters