For years, priced-out homebuyers sat on the sidelines, praying for a market reversal to bring housing costs down from the heavens. Next year, their prayers might be answered – sort of.
For years, priced-out homebuyers sat on the sidelines, praying for a market reversal to bring housing costs down from the heavens.Home prices and sales both are projected to drop in 2023, according to a new California Association of Realtors forecast released today.
Even after falling almost 9%, 2023’s median house price still would be 15% higher than in 2020, the year the pandemic hit, and up 28% from 2019. If next year’s forecast is accurate, house sales will be 25% lower than in 2021, when 444,520 single-family homes changed hands. Realtor economists foresee a “modest recession” next year caused by the Federal Reserve’s battle to curb inflation. The 2023 gross domestic product is forecast to drop 0.5% — the first annual decline since the pandemic throttled the economy in 2020.
“High inflationary pressures will keep mortgage rates elevated, which will reduce buying power and depress housing affordability for prospective buyers in the upcoming year,” CAR Chief Economist Jordan Levine said in a statement. “As such, housing demand and home prices will soften throughout 2023.”
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