The housing market is confusing top real-estate forecasters, and no one agrees if home prices are go
Phil Rosen Wed, April 12, 2023 at 6:45 PM MDT·2 min read
Top forecasters are divided on the housing market outlook for 2023.
Zillow economists expect home prices to rise over the next year, while those at Moody's see the opposite.
Here's how top real-estate forecasters expect home prices to change this year.
The housing market has sent mixed signals lately, and that's left the real-estate forecasters torn on what comes next for home prices.
In fact, home prices are falling and rising concurrently, depending on where you look, with declines in the West and gains in the South and East.
Where the housing market goes from here largely depends on the Fed's trajectory on interest rates, which influence mortgage rates. Last month's financial turmoil that began with Silicon Valley Bank has led analysts to forecast that a pause or cut in rate hikes could be looming.
Here's how top firms expect home prices to move in 2023.
Zillow: Home prices will rise
Based on the Zillow Home Value Index, analysts forecast that home prices will increase 0.5% from January 2023 to January 2024.
Skylar Olsen, Zillow's chief economist, told Insider at a reporter roundtable last week that the lack of inventory makes it difficult to anticipate price declines.
"We can't promise that home prices will continue to fall because the inventory is not there to allow that to happen," she said. "I really don't know where the inventory comes from to help prices come down."
CoreLogic: Home prices will rise
After seven consecutive months of declines, the CoreLogic Home Price Index showed a 0.8% sequential rise in February, and the firm's chief economist said last week that pent-up homebuyer demand alongside declining rates has pushed Americans back into the market.
By February 2024, CoreLogic expects home prices to increase year over year by 3.7%.
Moody's Analytics: Home prices will fall
The firm's economists expect home prices — as measured by Moody's Analytics Repeat Sales House Price Index — to fall 4.2% between December 2022 and December 2023.
"Likely increases in unemployment and a US recession later this year will additionally pressure sales and prices," analysts from Moody's Investors service wrote in a report early this month.
National Association of Realtors: Home prices will rise
In a report published in March, the NAR forecasted that existing home prices will see a 1.3% climb by the first quarter of 2024, and new home prices will see a 2.6% increase for the same period.
Nadia Evangelou, senior economist and director of forecasting at the NAR, told Insider last month that the banking crisis could lead to mortgage rates falling faster than expected, which could ultimately lead to more buyers entering the market.
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