Falling Home Prices, Sinking Sales Set the Stage for a 2023 Market Correction

After easing into a nationwide price correction throughout 2022, the housing market is expected to see an even more substantial slowdown in 2023, Zillow reports. After rising 10.4% during the 12 months ending in November, the national Zillow Home Value Index is expected to fall 1.1% over the next 12 months as weaker home sales lead to a boost in stagnant inventory.

As affordability challenges persist throughout the year ahead, Zillow expects a total of roughly 4.4 million existing home sales in 2023, a 13% decrease from the projected full-year 2022 total of 5.0 million.

Zillow expects 5.0 million existing homes to be sold in calendar year 2022 – a 17.5% decrease compared to 2021. This is down slightly from November’s forecast for 5.1 million sales. High mortgage rates and major affordability challenges are predicted to drive even weaker sales in 2023, when they are projected to total 4.4 million, a 13% decrease from the projected full-year 2022 total.

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