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Of a panel of 107 experts polled by Zillow, a majority agreed that rising mortgage rates reduce competition among buyers, which will ultimately create a buyer’s market.

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Home sellers should prepare for the housing market to swing firmly in favor of buyers before the end of 2023, according to a panel of 107 economists and housing experts.

A majority of experts on the panel, interviewed by Zillow, agreed that rising mortgage rates are reducing competition among homebuyers, which will eventually firm up the buyer’s market by the end of next year.

The panel also observed that home price appreciation is slowing due to high mortgage rates, and it predicted that growth in rental prices will outpace inflation as potential home buyers put increased pressure on the market. rental.

Nicole Bachaud

“After the rampant run on real estate over the past two years, buyers are finally seeing a calmer market,” Nicole Bachaud, senior economist at Zillow, said in a statement. “Those who can still afford home ownership are quickly regaining lost leverage, but this shift to a more balanced market is still in its infancy. Buyers of homes priced off the market are in a tough spot, however, as high and rising rents could further reduce their ability to save for a down payment.

Fifty-six percent of the panel expected a significant shift in favor of buyers over the next year. Twenty-four percent predicted the change would happen in 2024, 13% expected it to happen in 2025, and 8% expected it to happen after 2025.

Although the market has cooled, it is still far from its pre-pandemic level. According to Zillow’s latest market report, typical listing time to market, while increasing, is still 11 days lower than it was in 2019. Although inventory is growing, it is still lower 42% from what it was in 2019.

Panel members predicted that inexpensive Midwestern markets, such as Columbus, Minneapolis and Indianapolis, would be the least likely to see house prices decline over the next 12 months, while fast-growing Southern markets like Atlanta, Nashville and Charlotte should maintain their advantage. .

The markets the panel expected to cool the most were those that had seen the most dramatic growth over the past two years, including Boise, Raleigh and Austin, with some of those cities already experiencing the declines in the most spectacular prizes.

Panelists predicted annual rent growth of 5.4% through 2023, down from the 8.6% annual rent growth they forecast for the end of 2022. All 107 respondents said predicts home price depreciation in 2023.

“U.S. home price appreciation is clearly moderating in response to the historic spike in mortgage rates,” Terry Loebs, founder of Pulsenomics, said in a statement. “Our panel’s average projections indicate that residential rent price growth is expected to outpace headline CPI inflation over the next three years and outpace house price growth through at least 2025. will remain high and persist for years to come.

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Source : www.inman.com

The buyer’s market is now expected by the end of 2023, economists predict – allhomes.news

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