The NAR says half the nation could see slight home price declines in 2023.
The National Association of Realtors announced this afternoon that it forecasts existing-home sales will reach 4.78 million in 2023.
This marks a 6.8% decline compared to 2022 existing-home sales of 5.13 million.
This latest forecast was delivered by NAR Chief Economist Lawrence Yun during the association’s fourth annual year-end Real Estate Forecast Summit.
Prices should remain stable in 2023, however. Yun expects the median home price to reach about $385,000, edging upward by just 0.3% compared to a median home price of $384,500 in 2022.
“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10–15%.”
Yun expects rent prices to rise 5% in 2023, following a 7% increase in 2022. He predicts foreclosure rates will remain at historically low levels in 2023, comprising less than 1% of all mortgages.
Additionally, Yun forecasts the U.S. GDP will grow by 1.3%, roughly half the typical historical pace of 2.5%.
After rising above 7% in late 2022, Yun predicts that the 30-year fixed mortgage rate to settle at 5.7% as the Fed slows the pace of rate hikes to control inflation. Yun also noted this is lower than the pre-pandemic historical rate of 8%.
Regarding real estate markets to watch in 2023, here are the top markets the NAR identified as metro areas that will be strong performers in 2023.
- Atlanta-Sandy Springs-Marietta, Ga.
- Raleigh, N.C.
- Dallas-Fort Worth-Arlington, Texas
- Fayetteville-Springdale-Rogers, Ark.-Mo.
- Greenville-Anderson-Mauldin, S.C.
- Charleston-North Charleston, S.C.
- Huntsville, Ala.
- Jacksonville, Fla.
- San Antonio-New Braunfels, Texas
- Knoxville, Tenn.