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Housing prices should get back on track for steady growth during 2024, according to a panel of housing experts.
The panel, which was surveyed by Zillow and Pulsenomics for a report released Thursday, predicts that home prices will fall 1.6 percent annually by December 2023 with the market dampened by affordability concerns, before growth picks back up in 2024 and hits a rate of 3.5 percent annual growth every year through 2027.
“The housing market is resetting,” Zillow senior economist Jeff Tucker said in a statement. “Though we’re seeing early signs of renewed buyer interest early this year, prices should generally flatten out in 2023, helping buyers to catch up.
“The sheer number of people in the first-time homebuyer age range and a lack of inventory should limit price declines. A return to more normal growth would be welcome after the rollercoaster ride that home prices have been on lately.”
Zillow’s own in-house forecasts predict relatively flat housing prices with the typical U.S. home value rising 0.2 percent through 2023. The largest price declines are predicted in expensive California cities.
The panel predicts that mortgage rates would start to trend downward again after the first quarter of 2023. Rates fell to around 6 percent to start the year, breathing life into the market but climbed again in February, which experts have predicted will slow the market again.
Asked when rates for a 30-year mortgage will be at their highest between now and 2025, 63 percent of panelists selected the first quarter of 2023. Twenty-two percent pointed to the second quarter of 2023, while other quarters earned 6 percent or less combined.
The median survey respondent predicts a 6 percent 30-year mortgage rate by the end of 2023.
“The majority of experts are now predicting an outright decline in U.S. home prices in 2023,” Terry Loebs, founder of Pulsenomics said in a statement. “Although mortgage rates have moderated and are expected to remain close to the 6% level at year-end, the 2022 rate spike – and the record-high mortgage costs it ushered in – continues to shake home price expectations and market psychology.”