Many economic forecasters believe housing prices will decline, but that homebuyers shouldn’t fear buying during a declining market. Morgan Stanley predicts a 7% dip in home prices for 2023 that would return housing prices to where they were in January 2022 – 32% higher than prices were in March 2020 when the pandemic began.
Economists with Goldman Sachs and Moody Analytics are predicting 5% to 10% declines in home prices, based on a lack of homebuyer affordability, slowing housing sales, fewer mortgage applications and a looming recession, however mild.
BusinessInsider.com reports that the Federal Reserve’s overnight rate hikes have raised mortgage interest rates, pushing affordability to new lows, but that a recession could bring interest rates down again. That combined with softer homebuying demand due to inflation and sellers lowering their prices would make spring and summer 2023 great times to buy a home.