Housing economist forecasts 2023 decline in existing home sales

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Next year could see the sale of 4.78 million existing homes, according to a forecast published by Lawrence Yun, chief economist and senior vice president of research with the National Association of Realtors (NAR).

Yun predicted home sales will decline by 6.8% compared to the 5.13 million existing homes sold this year, and he forecasted the median home price will reach $385,800, a slight 0.3% uptick from this year’s $384,500.

“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 predicted foreclosure rates will remain at historically low levels in 2023, comprising less than 1% of all mortgages. As for mortgage rates, Yun is predicting the 30-year fixed mortgage rate will settle at 5.7%, adding this will be lower than the pre-pandemic historical rate of 8%. And on the rental side of the housing market, Yun expected rent prices to rise 5% in 2023, following the 7% increase that took place this year.

As for the hot real estate markets of 2023, Yun is pointing south, with the top 10 markets to watch consisting of Atlanta-Sandy Springs-Marietta, Georgia; Raleigh, North Carolina; Dallas-Fort Worth-Arlington, Texas; Fayetteville-Springdale-Rogers, Arkansas-Missouri; and Greenville-Anderson-Mauldin, South Carolina; Charleston-North Charleston, South Carolina; Huntsville, Alabama; Jacksonville, Florida; San Antonio-New Braunfels, Texas; and Knoxville, Tennessee.

“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5% in 2023.”

Westchester and Fairfield County Business Journals

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