What Home Prices Will Look Like In 2023, According To Fannie Mae

Homebuyers just got more bad news: In January, 70% of homes for sale ended up in a bidding war. That’s the highest rate on record. Simply put: So far, 2022 hasn’t delivered any relief for home shoppers. Heading into 2022, there was a broad consensus in the real estate industry that home price growth would decelerate significantly this year. But just over two months into the new year, some of those same firms are walking back their 2022 forecasts. Zillow was forecasting that home price growth—which was up 18.8% between December 2020 and December 2021—would decelerate to 11% growth this year. Then last month, Zillow revised that rate up to 17.3%.

Zillow isn’t alone: Fannie Mae just became the latest real estate firm to shift up its 2022 forecast. Last year, Fannie Mae predicted that the median existing home price would climb 7.9% this year. Now, Fannie Mae says the median existing home price in 2022 will jump from $355,000 to $384,000. That would come out to an 11.2% year-over-year price jump.

If home prices do rise another 11.2%, it would mark a deceleration from the current growth rate. However, that would hardly represent relief for home shoppers. After all, the typical raise that corporate America plans to dole out this year is only 3.9%. But Fannie Mae does still think relief will come, it just won’t happen until 2023. Next year, Fannie Mae projects home prices will rise 4.2%—with the median existing home price jumping to $395,000.

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Source: Fortune