After initially predicting an increase in homes for sale as well as a run up in home prices and rents, Realtor.com is now revising its 2023 forecast. For the second half of the year, Realtor.com chief economist Danielle Hale predicts home prices, mortgage interest rates, and rents will come down a little bit, but no big price drops are expected.
Though Hale originally anticipated prices would rise by 5.4%, she now says median home list prices could dip 0.6% in 2023 compared with 2022, but that housing correction varies by region.
The declines are at least partly due to prices having fallen in the nation’s priciest real estate markets, such as in the West. Buyers simply couldn’t afford those price tags plus high mortgage rates, so something had to give. In the more affordable Midwest and Northeast, prices have steadied or even risen.
“We’re seeing more divergence between how local housing markets are doing,” says Hale. “In areas that are more affordable, we’re seeing more buyer interest, more sales, and more competition keeping prices high.”