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 headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?
While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.
What the Experts Are Saying About Home Prices Next Year
The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:
As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.
While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.
What Does This Mean?
Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.
The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest forecast from Wells Fargo shows that, while they feel prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation.
And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.
As Jason Lewris, Co-Founder and Chief Data Officer for Parcl,says:
“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”
Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to a local real estate professional for the guidance you need each step of the way.
Whether you’ve just retired or you’re thinking about retirement, you may be considering your options and trying to picture a whole new stage of your life. And you’re not alone. Research from the Retirement Industry Trust Association (RITA) shows 10,000 Baby Boomers reach the typical retirement age (65) every day, and only 47% of the people in that generation have already retired.
If this sounds like you, one thing worth considering is whether or not your current home will suit your new lifestyle. If your home doesn’t have the features or benefits you’re looking for, the good news is, you may be in a better position to move than you realize.
That’s because, if you already own a home, you’ve likely built-up significant equity, and that can help you fuel your next move. According to the National Association of Realtors (NAR):
“A homeowner who purchased a typical home five years ago would have gained $125,300 from just price appreciation alone.”
In fact, over the last twelve months, CoreLogic reports the average homeowner in the United States gained roughly $64,000 in equity due to home price appreciation.
You can use your equity to help you achieve your homeownership goals. Whether you want to downsize, move closer to loved ones, or buy a home in a dream destination, your equity can help get you there. It may be some (if not all) of what you’d need as your down payment on a home that better fits your changing needs.
Retirement is a big step and so is buying or selling a home. As you move into this new phase of life, let’s connect so you have an expert to guide you through the process as you sell your current home and give you expert advice as you buy one that’ll better suit your needs.
If you own a home, your net worth likely just got a big boost thanks to rising home equity. Equity is the current value of your home minus what you owe on the loan. And today, based on recent home price appreciation, you’re building that equity far faster than you may expect – here’s how it works.
Because there’s an ongoing imbalance between the number of homes available for sale and the number of buyers looking to make a purchase, home prices are on the rise. That means your home is worth more in today’s market because it’s in high demand. As Patrick Dodd, President and CEO of CoreLogic, explains:
“Price growth is the key ingredient for the creation of home equity wealth. . . . This has led to the largest one-year gain in average home equity wealth for owners. . . .”
Basically, because your home value has likely climbed so much, your equity has increased too. According to the latest Homeowner Equity Insights from CoreLogic, the average homeowner’s equity has grown by $64,000 over the last 12 months.
While that’s the nationwide number, if you want to know what’s happening in your area, look at the map below. It breaks down the average year-over-year equity growth for each state using the data from CoreLogic.
The Opportunity Your Rising Home Equity Provides
In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale. In a market where homeowners are gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home.
So, if you’ve been holding off on selling or you’re worried about being priced out of your next home because of today’s ongoing home price appreciation, rest assured your equity can help fuel your move.
If you’re planning to make a move, the equity you’ve gained can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect so you can get a professional equity assessment report on your house.