The U.S. housing market proved to be largely difficult to predict for Wall Street analysts to predict over the course of 2023. Initially forecasting a 4.5% decline in U.S. home prices over the course of 2023, Wells Fargo economist Charlie Dougherty decided to make a sharp U-turn, adjusting his forecast to a 1.8% gain as Mortgage rates headed toward 8% in October.
Economists at Morgan Stanley and Goldman Sachs polled by Bloomberg also reversed the direction of their housing price forecasts as a result of this market unpredictability. According to the latest data from the S&P CoreLogic Case-Shiller national home price index, home prices have risen 4.8% year over year, thereby making JPMorgan’s James Egan the strategist with the most accurate prediction, forecasting a 4% rise.
“The housing market has proven even more resilient than we had expected,” Goldman Sachs fixed income strategist Vinay Viswanathan reflected. “While we are cognizant of the tailwind from tight housing supply, we expect affordability will likely stay poor, ultimately pushing prices lower in 2023.”