What’s Ahead for Home Prices in 2023
Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.
Selma Hepp, Chief Economist at CoreLogic, says:
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Additionally, every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:
So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:
- Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
- Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
- Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.
Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.
The Philadelphia market
What about the local market?
At the end of January, the home value index (BrightMLS) was $216,519, a 5.5% increase from 2022. With an average annual appreciation of 6% since 2000, Philly's growth is right on target. Due to sharp increase in values after 2020, with double digits in 2021 and 2022, this is a noteworthy enough decline to get the media going. Expect almost no change in the next 12 months. By county: +0.1% in Philadelphia, +0.4% in Delaware, +0.6% in Montgomery, +0.6% in Bucks, +0.6% in Chester. * (Zillow Home Value Forecast.) This consistency across the counties reflect stability versus sharp highs and lows in the market. Whether you are looking to buy or sell, it's always best to make a move is when you feel ready to do so!