HomeReal EstateEconomists Expect U.S. Home Prices to Decrease By 10% This Year

Economists Expect U.S. Home Prices to Decrease By 10% This Year

Housing economists are expecting U.S. home prices to decline by 10% this year as tighter lending requirements and inflation concerns beat down demand.

Since hitting their post-pandemic high in the second quarter of 2022, housing prices have been constantly coming down. According to data from Redfin, the median U.S. home price in March was $400,706; a 3.3% decline on an annual basis. This is also an 8% decline from peak pricing in May 2022.

Abbey Omodunbi, PNC Bank Senior Economist, stated that a decline in demand and excess supply are expected to drive down prices this year.

“Financial conditions will likely tighten in 2023,” Omodunbi observed. “We do expect the Fed to raise the Fed funds rate by a quarter of a percentage point going into the meeting in two weeks. And also after the bank failures in March, many banks are likely to be more cautious. So we might see some tighter lending standards.”

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