What Experts Say Will Happen with Home Prices Next Year

Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, just at a slower pace. Over the past couple of years, home prices have risen at an unsustainable rate, leaving many to wonder how long it would last. If you’re asking yourself: what’s ahead for the price of my home, know that experts are now answering this question, and its welcome news for homeowners who may have been led by the media to believe their home would lose value.
 
Historically, home prices have appreciated at a rate near 4%. For 2023, the average of six major forecasters noted below is 2.5%. While one, Zelman & Associates, is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where they project home prices are going in the coming year.
 
To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert, says this:
 
“The root issue of what drives house prices almost always is supply and demand . . .”
 
Two things are driving home prices upward. First, the undersupply of homes on the market is an issue we continue to face in this country. We still don’t have enough homes on the market for the number of people that want to buy them. To further that point, we’re still in a sellers’ market nationally, and in that scenario, home prices tend to appreciate.
 
Second, millennials are moving through their peak homebuying years. Since they’re the largest demographic behind the baby boomers, demand isn’t going away any time soon.
 
Bottom Line
 
Experts are calling for home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple. The dynamics of supply and demand are playing out in real estate and will continue for many years to come.
 

Recent Blog Posts

Stay up to date on the latest real estate trends.

Mortgage Rates Will Come Down, It’s Just a Matter of Time

This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home pr… Read more

Should You Update Your House Before You Sell?

You may be wondering what, if anything, needs to be renovated before you sell your house. We can help you figure out where to best spend your time and money.

Top Questions About Selling Your Home This Winter

There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to sell your hou… Read more

What’s Ahead for Mortgage Rates and Home Prices?

Now that the end of 2022 is within sight, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about b… Read more

Real Estate

Key Factors Affecting Home Affordability Today

Every time there’s a news segment about the housing market, we hear about the affordability challenges buyers are facing today. Those headlines are focused on how much… Read more

Real Estate

Homeownership Wins Over Time

If you’re questioning whether or not to buy a home this year due to today’s cooling market, consider the long-term financial benefits of homeownership.

3 Graphs Showing Why Today’s Housing Market Isn’t Like 2008

With all the headlines and talk in the media about the shift in the housing market, you might be thinking this is a housing bubble. It’s only natural for those thought… Read more

What Happens to Housing when There’s a Recession?

Since the 2008 housing bubble burst, the word recession strikes a stronger emotional chord than it ever did before. And while there’s some debate around whether we’re … Read more

What’s Ahead for Home Prices?

As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation is cooling as well. And if you’re following along with headline… Read more

Let’s Talk

You’ve got questions and we can’t wait to answer them.