Will Home Prices Drop in 2023: What Will Happen in 2023?

Abstract

Even if price growth slows this year, a fall in home prices is quite unlikely. House prices rose nationwide in April, up 1.6 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index. Housing Prices Are Rising in 2022: Quarterly Report U.S. house prices rose 18.7 percent from the first quarter of 2021 to the first quarter of 2022 according to the Federal Housing Finance Agency House Price Index. "Strong demand coupled with tight supply have kept prices climbing. Through the end of March, higher mortgage rates have not yet translated into slower price gains, but new home sales have dropped during the last few months, with a significant falloff in April." Key Housing Prices Trends Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012. Annual price increases were most significant in Cape Coral-Fort Myers, FL, where prices increased by 41.3 percent. Annual house price appreciation was weakest in the Middle Atlantic division, where prices rose by 14.6 percent between the first quarters of 2021 and 2022. The current rate of home price growth is unsustainable, and higher mortgage rates combined with increased inventory will result in slower home price growth but unlikely any price decline.