Real Estate Housing Market 2023

Real estate housing market 2023. Researchers at investment banking giant Goldman Sachs predict that the US housing market will end in 2022 on a low note, with significant declines in home sales and price growth

But it won't stop there. Next year will be wors

Real estate housing market 2023 predictions

Housing Market Outlook: In a research paper titled "The Housing Recession: Beyond the Recession," published Tuesday for clients, Goldman Sachs economists predict larger downturns in 2023.

“We expect home price growth to come to a complete halt, averaging 0% in 2023,” Goldman said, according to Bloomberg.

But they don't expect a dramatic free fall.

"While absolute declines in national home prices are possible and seem quite likely in some areas, a significant decline seems unlikely."

However, in 2024, the real estate market may begin to recover.

These expectations come as homebuyers withdraw from the housing market amid rising interest rates. It's a dramatic turnaround after more than two years of unbridled demand after the COVID-19 pandemic sent the local market into a frenzy, thanks to low loan rates and new flexibility for an explosion in remote work.

The pandemic housing rush had a major impact in the West, especially in developing states such as Idaho and Utah that offered more space and larger homes at a relatively lower price than the big cities in states such as New York and California.

The Goldman forecast also comes just days after Federal Reserve Chair Jerome Powell, in the Fed's ongoing war on inflation, warned investors that interest rates would rise further.

"While higher interest rates, slower growth and weak labor market conditions will reduce inflation, they will also cause some pain for households and businesses," Powell said. These are the unfortunate costs of lowering inflation. But failure to restore price stability will mean more pain."

The Federal Reserve is due to meet in late September and is likely to follow the 0.75% increases imposed in June and July, the largest series of interest rate increases in decades, with another 0.5% rise at 0.75%.

In numbers: Goldman Sachs expects U.S. housing market activity to lock down in 2022 overall, with new home sales down 22%, existing home sales down 17%, and an 8.9% drop in housing GDP, the magazine reports Fortune.

2023 housing market predictions

In 2023 housing market predictions, Goldman Sachs forecast deeper declines in home sales, forecasting another 8% decline. For existing home sales, researchers predict they will fall another 14%, and housing GDP will fall another 9.2%.

However, Goldman Sachs does not expect prices to fall in 2023. While the researchers expect home price growth to slow significantly, they also expect price growth to remain in the green, albeit barely. They expect home prices to rise by just 1.8% in 2023.

This is in line with expectations of the Mortgage Bankers Association, Fannie Mae, Freddie Mac, CoreLogic and Zillow, which also expect home prices to rise in single digits, Fortune noted. Moody's Analytics anticipates some more significant price drops in certain areas, particularly "overvalued" areas like Boise, Idaho.

However, in 2024, Goldman Sachs predicts that the tide will turn, and expects home price growth to rise to 3.5% in 2024 and 3.8% in 2025.

Is the housing market collapsing?

No, although the housing market has entered a recession in terms of moderate sales and demand, it is still far from what we saw in 2006, when the housing bubble burst, fueled by risky bank lending practices that fueled artificial demand.

Today, experts note that the demand across the country is real. The nation is still facing a housing shortage. Americans want to buy homes, but high mortgage rates have left many out of prices or prevented many from wanting to navigate the market right now.

Goldman Sachs explains why the current real estate market is not in the same place, despite the recession:

“The slowdown in the housing sector in the past was accompanied by an overall economic stagnation, which led to an outflow of housing supply with rising unemployment and people finding themselves.

Source : deseret.com Real estate housing market 2023

Share this post