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Will Home Prices Drop in 2023: Housing Market Predictions 2023

December 1, 2022 by Marco Santarelli

Housing Market Predictions 2023

Will house prices go down in 2023? Depending on who you ask, the forecast for 2023 is mixed. Most experts in the housing industry predict less buyer demand, lower prices, and higher borrowing rates. Rate increases, along with a shortage of availability, have pushed many purchasers to the sidelines. Home prices may fall slightly, but not drastically as they did in 2008. Some believe that the housing market will continue to outperform compared to the pre-pandemic.

Hence, there is no clarity regarding the housing market forecast for 2023. Most analysts predict that home prices will grow in the majority of the housing markets next year albeit slightly. If inflation persists, the Fed could tighten more than anticipated by the financial markets. This would result in higher mortgage rates, which will impact the U.S. housing market. If inflation falls or a recession develops in the near future, the Fed may soften financial conditions.

In its most recent prediction, Fannie Mae reiterated its opinion that the housing market will push the United States into recession at the beginning of 2023. According to their estimate, home prices could fall in 2023. The slowing effect of rising mortgage rates on the housing market has been mostly predicted, and home values appear to have already begun to trend downward. Looking ahead to the entire year 2023, the ESR group predicts a 1.5% fall in national home prices.

While Zillow predicts that home values will rise in most markets over the next 12 months, it does not expect much growth in the remaining months of 2022. It predicts that home values will fall in 271 markets over the next twelve months. In August, the rate of drop in U.S. home prices was comparable to that of the previous month (FHFA House Price Index).

This is the first time since March 2011 that the index has declined for two consecutive months, according to Will Doerner, Ph.D., a Supervisory Economist with the FHFA's Division of Research and Statistics. Higher mortgage rates continued to exert pressure on demand, significantly slowing the growth of home prices in the nation.

<<<Also Read: Lastest National Housing Market Trends>>>

Will Home Prices Drop in the United States?

Here's when home prices can drop. While this may appear to be oversimplified, it is how markets work. Prices drop when demand is met. There is now an excessive demand for houses in several property markets, and there simply aren't enough homes to sell to prospective purchasers. Home construction has increased in recent years, although they are still far behind. Thus, big drops in housing prices would necessitate considerable drops in buyer demand.

Demand falls mostly as a result of higher interest rates or a general weakening of the economy. Rising interest rates would ultimately need far less demand and far more housing supply than we now have. Even if price growth slows this year, a drastic fall in home prices is quite unlikely. As a result, there will be no fall in house values; rather, a pullback, which is natural for any asset class. In the United States, house price growth is forecasted to just “moderate” or slow down in 2022 as well as 2023.

Housing supply will decrease in 2023 to maintain upward pressure on home prices as single-family homebuilding sees a decline next year. In October, the NAHB homebuilders group announced that homeowner confidence has dropped for the tenth consecutive month. According to Robert Dietz, chief economist for the National Association of Home Builders, despite a modestly increased inventory that is mostly attributable to price-weary prospective buyers, housing supply is projected to stay limited in 2023.

As higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers, the single-family homebuilding industry will experience a sharp decline in 2023. “This will be the first year since 2011 to see a decline for single-family starts,” said NAHB Chief Economist Robert Dietz. Some analysts have stated that the housing market is now more ‘balanced,' but according to Dietz, the homeownership rate will drop in the next quarters as rising interest rates and building costs continue to price out a substantial proportion of prospective buyers.

According to Mortgage News Daily, the interest rate on a 30-year fixed mortgage was 7.29% on Monday. This marks the highest 30-year rate in the past 20 years. “Nobody anticipated this turn of events. We had anticipated an interest rate of no more than 5%, and certainly not 7%, “added Evangelou, who went on to say that the National Association of Realtors had to make many adjustments to its forecast throughout the course of this year.

According to the study published by the organization, the median sales price of a home in the United States was $384,800 in September. This is an increase of 8.4% from the price of $355,100 in September 2021. Prices increased across the board. Evangelou stated that assuming a down payment of 10%, the monthly mortgage payment is now $1,000 more expensive than it was a year ago.

If you are new to the housing market, you should familiarise yourself with the following: contingency, foreclosure, and housing market projections. Jerome Powell, the chair of the Federal Reserve, stated earlier this month that the housing market may require “a correction” in order to make homes more affordable.

Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012. Between the second quarters of 2021 and 2022, all 50 states and the District of Columbia saw an increase in housing prices. In today's housing market of high mortgage rates, buyers are still driving up property prices, leading homes to sell rapidly. During this pandemic, we saw hyperactive buyers make offers without seeing the property and forego contingencies to win bidding wars in the highly competitive housing market.

The historically low mortgage rates fueled an increase in demand, particularly among millennials. However, they are running into a shortage of available housing and now have to face higher rates of close to 6%. Many buyers are still in hope of finding a home that fits their budget and needs. Despite popular belief that now is not a good time to buy, many home buyers are looking to lock in their monthly housing payments.

Although the housing market is still expected to favor sellers we appear to be at a tipping point in the housing market, where prices have risen so dramatically that buyers are backing off and home sales are slowing down considerably as compared to last year. House prices fell nationwide in August, down 0.7 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®).

House prices rose 11.9 percent from August 2021 to August 2022. The previously reported 0.6 percent price decline in July 2022 remained unchanged, For the nine census divisions, seasonally adjusted monthly house price changes from July to August 2022 ranged from -2.0 percent in the Mountain division to +0.4 percent in the New England division. The 12-month changes were all positive, ranging from +7.4 percent in the Pacific division to +16.2 percent in the South Atlantic division.

Will Home Prices Drop? — **Source: FHFA House Price Index Monthly – October 2022**

Home Prices Are Rising: Quarterly Report (Q2 2022)

U.S. home prices rose 17.7 percent from the second quarter of 2021 to the second quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 4.0 percent compared to the first quarter of 2022. FHFA’s seasonally adjusted monthly index for June was up 0.1 percent from May.

“Housing prices grew quickly through most of the second quarter of 2022, but a deceleration has appeared in the June monthly data” said William Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “The pace of growth has subsided recently, which is consistent with other recent housing data.”

Note: The report for the third quarter will be released by the end of November.

Key Housing Prices Trends

Nationally, the U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012.
House prices rose in all 50 states and the District of Columbia between the second quarters of 2021 and 2022.
House prices rose in all of the top 100 largest metropolitan areas over the last four quarters.
Annual price increases were most significant in North Port-Sarasota-Bradenton, FL, where prices increased by 36.4 percent
Prices were weakest in Washington Arlington-Alexandria, DC-VA-MD-WV (MSAD), where they increased by 9.1 percent.
Of the nine census divisions, the South Atlantic division recorded the strongest four-quarter appreciation.
It posted a 23.0 percent gain between the second quarters of 2021 and 2022 and a 5.2 percent increase in the second quarter of 2022.
Annual house price appreciation was weakest in the West North Central division, where prices rose by 13.9 percent between the second quarters of 2021 and 2022.

Home Prices Increasing the Fastest in these States?

Florida 29.8 percent
Arizona 25.5 percent
North Carolina 25.2 percent
Montana 24.9 percent
Tennessee 24.3 percent

Where Are Home Prices Increasing the Slowest?

District of Columbia 5.2 percent
North Dakota 10.6 percent
Louisiana 10.8 percent
Minnesota 11.3 percent
Maryland 12.0 percent

house price trends 2022 — Source: FHFA House Price Index Report – 2022 Q2

Housing Market Forecast 2023: Will Home Prices Drop in 2023?

Homeowners, sellers, buyers, and renters may be unimpressed in 2023. As mortgage rates rose in 2022, home sales slowed, leading to a decrease in home price rise and moving the housing market balance away from sellers. A slowing in home price increase won't be enough to make the housing market a buyer's bonanza as mortgage rates continue to rise as the Fed guides the economy to a soft-ish landing.

Homebuyers will benefit from a growing number of homes for sale, but costs will stay high, limiting affordability as budgets tighten. If buyers and sellers have unreasonable expectations, 2023 could be a stalemate. According to Realtor.com, 2023 could be a “nobody's-market” for buyers and sellers. Consumers who are ready for the challenge will need up-to-date information on market conditions, creativity and flexibility to adjust, and a healthy dose of patience in order to create success.

Buyers will have some things to look forward to in 2023. There will be more homes for sale, homes will likely take longer to sell, and buyers will not encounter the intense competition that has been usual in recent years. However, affordability issues keep 2023 from being a huge buyer's market, particularly for first-time homebuyers who have already endured significant problems.

Home sellers should be aware that fewer buyers are projected to be looking for a property in 2023, as rising home prices and mortgage rates drive some prospective purchasers to postpone their purchases. As a result, sellers should expect increased competition from other for-sale postings, lengthier transaction timescales, and more bargaining with buyers.

Here's the forecast for key housing indicators by Realtor.com:

1. Mortgage Rates: 7.4% (avg) and 7.1% (year-end)
2. Existing Home Median Price Appreciation (Y/Y): +5.4%
3. Existing Home Sales (Y/Y | Annual Total): -14.1% to 4.53 million
4. Existing Home For-Sale Inventory (Y/Y): +22.8%
5. Single-Family Home Housing Starts (Y/Y | Annual): -5.4% to 0.9 million
6. Homeownership Rate: 65.7%
7. Rent Growth: +6.3%

Zillow’s home value forecast remained unchanged in October, as the housing market continued to slow amid rising mortgage rates and broader economic uncertainty. The home value growth will continue to slow over the coming months. According to Zillow's monthly home value forecast, the national Zillow Home Value Index, which climbed by 12.9% in the twelve months ending in September 2022, is predicted to increase by just 1.3% in the next twelve months ending with September 2023.

This forecast is consistent with last month's predictions, which predicted a 1.2% annual growth. And while Zillow anticipates a slowing of national home price growth to 1.4%, it will vary significantly by the regional markets. A weaker outlook for home sales also factors heavily into the lower forecast for home value appreciation.

Zillow’s home sales forecast now calls for 5.2 million existing home sales in 2022, up slightly from last month’s expectations for 5.1 million sales following a better-than-expected reading on home sales in August. Recent decreases in mortgage applications and pending house sales indicate that there are substantial negative risks to home sales volume in the calendar year 2023.

Metros Where House Prices Will Drop Most by September 2023

Some regional markets are projected to see home price declines. In August, Zillow economists predicted that 123 regional housing markets would see declining home values in the coming year. The number was later revised to 259 regional markets by Zillow economists in September. They now predict that home values will fall in 271 of the nation's 896 regional housing markets between September 2022 and September 2023. Fairbanks tops the list with the highest anticipated decline of 7%.

Metro Area	Change in Values
Minot, ND	-6.4%
Fairbanks, AK	-6%
Alexandria, LA	-5.6%
Helena, AR	-5.1%
Red Bluff, CA	-4.9%

Metros Where House Prices Will Increase Most by September 2023

Zillow still predicts that the vast majority of regional housing markets will see home values appreciating in 2023. Among the 897 regional housing markets that Zillow economists analyzed, 607 are predicted to see rising house prices between Sept 2022 and Sept 2023. Another 19 markets are predicted to remain flat.

Among the regions that are anticipated to have losses in value over the coming year are those that have experienced some of the largest increases in property values over the past year. Only one market in Ohio and one in Washington are forecasted to see year-over-year house price growth of 10% or greater.

Metro Area	Change in Values
Wooster, OH	+13.2%
Aberdeen, WA	+10.3%
Sanford, NC	+8.7%
Kapaa, HI	+8.3%
Pocatello, ID	+8.1%

According to Moody's Analytics' proprietary housing data, as reported by Fortune, home prices will rise 0% next year (2023), a significant decrease from the 19.7 percent price growth experienced by the housing market in the previous year. Analysts predict that price changes will vary significantly across the United States. Moody's predicts that home prices will rise in 183 of the country's 414 largest housing markets in 2023 while falling in 231 others.

According to Moody's analysts, the following five cities will see the greatest year-on-year increases in home prices in 2023:

Albany, Georgia (4.12 percent)
New Bern, North Carolina (4.12 percent)
Augusta, Georgia (3.84 percent)
Hartford, Connecticut (3.73 percent)
Casper, Wyoming (3.29 percent)

The company's analysts expect home prices to drop the lowest in these areas in 2023:

The Villages, Florida (6.96 percent)
Punta Gorda, Florida (6 percent)
Reno (5.57 percent)
Honolulu (5.56 percent)
Spokane, Washington (5.52 percent)

Researchers at Goldman Sachs published a study on August 30 with the title “The Housing Downturn: Further to Fall.” The investment bank's most recent projections indicate that overall activity in the United States home market will be lower by the end of 2022. The company anticipates significant drops in new home sales (down 22% from last year), existing home sales (down 17% from last year), and housing GDP (down 8.9% from last year). And you shouldn't anticipate any relief in the year 2023. Goldman Sachs forecasts additional drops in housing-related metrics such as new home sales (another 8% drop), existing home sales (another 14% loss), and housing GDP (another 9.2% drop) in 2023.

Housing Markets at High Risk of Price Decline in 2023

The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through August 2022 with forecasts through August 2023. Home prices nationwide, including distressed sales, increased year over year by 13.5% in August 2022 compared with August 2021.

On a month-over-month basis, home prices declined by 0.7% in August 2022 compared with July 2022. The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.0% from August 2022 to September 2022 and on a year-over-year basis by 3.2% from August 2022 to August 2023.

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Bremerton-Silverdale, WA is at very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Bellingham, WA; Boise City, ID; Crestview-Fort Walton Beach-Destin, FL and Olympia-Tumwater, WA are also at very high risk for price declines.

Housing Markets at Risk of Price Decline in 2023 — Source: CoreLogic

Will Housing Demand Exceed Supply, Raising Prices in 2023?

The broader outlook from several housing analysts is that housing demand will continue to surge due to several factors. For e.g; the millennials have aged into their prime homebuying years, and they are now the fastest-growing segment of home buyers. In 2018, millennial homeownership was at a record low but the situation has changed markedly. They are no longer holding back when it comes to homeownership.

According to the National Association of REALTORS’ Home Buyers and Sellers Generational Trends Report, millennials make up the largest share of the homebuying population at 43 percent, the most of any generation – an increase from 37% last year. They are also the most likely generation to use the internet to find the home they ultimately purchase and most likely to use a real estate agent.

The NAR report found that the combined share of younger millennials (23 to 31 years old) and older millennial buyers (32 to 41 years old) rose to 43% in 2021, up from 37% the year prior. Nearly two-thirds of younger millennials, or 65%, located the property they ultimately purchased online, a proportion that steadily declines with older generations. Eighty-seven percent of homebuyers utilized a real estate agent. This percentage was highest among younger millennials (92%) and older millennials (88%).

The study also found that first-time home buying among younger generations is on the rise, with over 4 out of 5 younger millennial home buyers – 81% – purchasing for the first time. Just under half – 48% – of older millennial buyers were first-time buyers. There is a surge of millennial buyers who are maturing into the conventional first-time buyer age bracket. Boomers comprised the highest proportion of house sellers at 42 percent, however, the ratio of millennial sellers has increased from 22 percent to 26 percent over the last year.

Millennials are expected to continue to drive the market and the participation of first-time homebuyers and older millennials is widely forecast to be elevated. Hence, housing prices cannot drop drastically in 2023. Inflation, excessive housing demand, and inadequate supply continue to drive up prices. Recent revisions by economists at Realtor.com have increased their 2022 median sales price appreciation projection for existing properties to 6.6 percent from 2.9 percent.

Many people have been priced out of the housing market by rising rents and rising mortgage rates, which have risen from an average of just 3.2% at the beginning of the year to 5.81% by mid-June. Mortgage rates then topped 7 percent in the last week of October, the highest level in 20 years. This has resulted in a decrease in property sales since more individuals are unable to pay the present high costs. Theoretically, home prices should fall for the remainder of this year and into 2023.

For starters, rising borrowing prices make credit more unaffordable. Second, as the economy continues to deteriorate, mortgage lenders are expected to approve fewer applicants. Although the housing market appears to be headed in the wrong direction, there are some bright spots. Economic forecasters, despite the recent recession, continue to expect robust demand from purchasers (millennials) and high home price increases in the housing market.

With homebuyers active and supply still lacking, the current trend of home prices will not see a reversal. In the last quarter of half of 2022, we are seeing a gradual shift in the real estate market away from sellers to more balanced conditions, with a rise in the number of properties entering the market. Existing-home sales descended in September, the eighth month in a row of declines. The market is heading to cool off, but house prices will not necessarily fall like crazy.

“The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%,” said NAR Chief Economist Lawrence Yun. “Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”

“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010 when inventory levels were four times higher than they are today.”

Despite a sluggish market and waning buyer enthusiasm, we anticipate that home demand will continue to outstrip available inventory. Increasing rental costs should add to this expected development. However, as the number of available homes increases, the demand for housing should decrease owing to affordability concerns. As a result, we are not on the verge of a housing market crash. 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 big price decline.

Sources:

https://www.zillow.com/research/data/
https://www.fhfa.gov/AboutUs/reportsplans/Pages/FHFA-Reports.aspx
https://www.noradarealestate.com/blog/housing-market-predictions/
https://www.realtor.com/research/2023-national-housing-forecast/
https://www.zillow.com/research/home-value-sales-forecast-october-2022-31556/
https://www.corelogic.com/intelligence/u-s-home-price-insights-october-2022/
https://fortune.com/2022/08/15/falling-home-prices-to-hit-these-housing-markets-in-2023-and-2024/
https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/
https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise

Housing Market Trends 2022: Will Home Prices Fall?

November 26, 2022 by Marco Santarelli

Current Housing Market Trends 2022

The housing market is predicted to slow down further in the last quarter of 2022. For sellers, this could be terrible news, but for buyers, it's great. Yet, there is still the problem of sky-high mortgage rates. The bright side is that if buyers hold off, the supply of homes will increase, putting further pressure on sellers to decrease prices. This would constitute a long-overdue course correction for the housing market.

Mortgage rates are skyrocketing. Home sales are declining. Supply is improving. Here are the latest housing market trends as seen in October 2022. We are witnessing a sharp halt in the housing market. The average 30-year fixed mortgage rate is currently just over 7%, up from roughly 3% earlier this year. This makes an already expensive housing market even more unaffordable.

If mortgage rates continue to rise, although, at a slower rate than in recent months, demand will decrease further in the last quarter of 2022, while home prices will continue to grow year-over-year, albeit at a slower rate. The real estate market has emerged as a boon for sellers and a source of worry for buyers in the middle of this epidemic. Home prices have been increasing in the mid-single digits for many years.

The median listing price trended up 13.3% in October to $425,000 as compared to the previous year and is slowly decelerating.
The median sales price of existing homes trended up 6.6% in October to $379,100, reaching 128 consecutive months of year-over-year increases.
Existing home sales fell 28.4% from one year ago.
New home sales rebounded 7.5% to a seasonally adjusted annual rate of 632,000 units last month.

Looking at these latest trends, the housing market appears to be fully in the “correction” area since mortgage rates have surpassed the 7% threshold, home sales have cooled dramatically, and fears of a national recession loom large. In the fourth quarter of 2022, experts anticipate a further slowdown in sales, rising interest rates, and heightened concern among buyers and sellers over the future.

However, the housing market will not crash. The main reason is that the current housing market is not driven by lax lending rules, subprime mortgages, or overly leveraged homeowners. Home price appreciation in the current housing market is backed by fundamentals and is defined by a relative deficiency of supply relative to demand. This demand has been fueled mostly by millennials entering their prime home-buying years, as opposed to fix-and-flip investors.

It appears that most markets will experience a seasonal slowdown in the fourth quarter of 2022. The present rise in mortgage rates is likely to have a further depressing effect on house sales activity, leading to a steeper decrease in sales than is typical for the end of the year. Price cuts on homes for sale are on the upswing, and with fewer people buying expensive (higher-priced) homes, housing values could fall even farther than initially anticipated.

“Seasonality plays an important role in the housing market since it has an impact on housing demand and supply,” says Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors (NAR). “Every year, transactions and prices tend to be above-trend in the summer, while activity typically slows down by the time winter comes. Activity in the last quarter typically drops by 15 percentage points from the third quarter. Nevertheless, I believe the market will remain competitive due to tight inventory.”

Housing Market Trends for Sales – October 2022

Existing Home Sales

With the exception of a temporary decline at the onset of the Covid 19 epidemic, existing home sales are at their slowest since September 2012. Home sales of previously owned homes rather than new construction — have been down all year. And, with both mortgage rates and housing prices staying high, buyers are unlikely to be in a hurry to make that purchase. According to new data from the National Association of Realtors (NAR), buyers are still taking a wait-and-see approach to the present housing market trends.

Existing-home sales include all non-new-construction home sales, such as single-family homes, condos, townhouses, and co-ops. According to the NAR report issued on November 18, existing-home sales in the United States declined for the ninth month in a row in October 2022. The 5.9 percent dip from September equates to a 28.4 percent year-over-year decline as compared to October 2021.

“More potential homebuyers were squeezed out from qualifying for a mortgage in October as mortgage rates climbed higher,” Yun said in a statement. “The impact is greater in expensive areas of the country and in markets that witnessed significant home price gains in recent years.”

Distressed sales – foreclosures and short sales – represented 1% of sales in October, down from 2% in September and identical to October 2021. Single-family home sales declined to a seasonally adjusted annual rate of 3.95 million in October, down 6.4% from 4.22 million in September and 28.2% from one year ago. Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 480,000 units in October, down 2.0% from September and 30.4% from the previous year.

In October 2022, 26 percent of total sales were made in cash, up from 22% in September and 24% in October 2021. This indicates that a sizeable group of buyers is not impacted by mortgage rate changes. Investors (who make up many cash sales) made up 16% of all transactions in October, up from 15% in September, but down from 17% in October 2021. This also shows that higher interest rates have less of an influence on investors' purchases as compared to first-time buyers.

Detached single-family houses continue to be in great demand. These properties provide greater living space and separation from adjacent houses than attached properties provide. Last month there was a surprising uptick in sales of new single-family houses and many experts believed that is likely to be short-lived as home prices continue to rise and the average contract rate for a 30-year fixed-rate mortgage tops 6 percent, decreasing affordability.

The West witnessed the largest monthly reduction in existing-home sales, with a 9.1 percent drop from September and a 37.5 percent year-over-year loss. Sales in the Northeast declined 6.6 percent month over month and 23 percent year over year, while sales in the Midwest fell 5.3 percent month over month and 25.5 percent year over year. The South experienced the smallest dip, with existing-home sales falling 4.8 percent since September and 27.2 percent year on year.

The South accounted for close to half of all the sales in October, accounting for 45 percent, followed by the Midwest at 24 percent and the West at 18 percent, with the Northeast accounting for only 13 percent. The highest sales were seen in the price segment of $250,000 to $500,000. This price range accounted for 48% of total home sales. The price segment in the $100,000 to $250,000 range accounted for 15% of total home sales. The price segment in the $500,000 to $750,000 range accounted for 19% of total home sales.

Existing home sales trends — Source: N.A.R.

New Home Sales

New home sales unexpectedly increased in October, despite rising mortgage rates and house prices, which have severely damaged affordability. According to the Commerce Department, new home sales increased 7.5% last month to a seasonally adjusted annual rate of 632,000 units. The September sales pace was lowered from the originally reported 603,000 units to 588,000 units.

Sales increased 45.7% in the Northeast and 16.0% in the densely populated South. However, they decreased by 34.2% in the Midwest and 0.8% in the West. New home sales are volatile on a month-to-month basis. Sales dropped 5.8% on a year-on-year basis in October. The housing market has been battered by aggressive Federal Reserve interest rate hikes aimed at containing high inflation by dampening economic demand.

According to Freddie Mac data, the 30-year fixed mortgage rate surpassed 7% in October for the first time since 2002. In the most recent week, the rate averaged 6.61%. The median new home price in October was $493,000, up 15.4% from the previous year. At the end of last month, there were 470,000 new homes on the market, up from 463,000 in September.

Houses under construction made up 63.4% of the inventory, with homes yet to be built accounting for the remaining 23.6%. Completed dwellings made up 13% of the inventory, far less than the long-term average of 27%. At October's sales pace, it would take 8.9 months to clear the market supply, down from 9.4 months in September.

new home sales trends — Source: The U.S. Census Bureau

Housing Market Trends for Sales Prices – October 2022

According to the National Association of Realtors®, despite a drop in existing-home sales and rising mortgage rates, median sale prices remain stubbornly high. The national median sale price for existing homes is now $379,100, slightly lower than September's median of $384,800 but up 6.6 percent from last year. This marks 128 consecutive months of year-over-year increases, the longest-running streak on record. Properties typically remained on the market for 21 days in October, up from 19 days in September and 18 days in October 2021.

Sixty-four percent of homes sold in October 2022 were on the market for less than a month. However, home prices are still being supported by limited supply. At the end of October, the total housing inventory registered at the end of October was 1.22 million units, which was down 0.8% from both September and one year ago (1.23 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in September and 2.4 months in October 2021.

The median existing single-family home price was $384,900 in October, up 6.2% from October 2021.
The median existing condo price was $331,000, an annual increase of 10.1%.
The median price in the Northeast was $408,700, an increase of 8% from one year ago.
The median price in the Midwest was $274,500, up 5.9% from the prior year.
The median price in the South was $346,300, an increase of 8% from October 2021.
The median price in the West was $588,400, a 5.3% increase from October 2021.

Housing Prices (Listing Prices) Continue to Trend Upward – October 2022

With a near record-low inventory of previously owned homes, some economists believe higher borrowing costs will have a moderate impact on the new housing market. In the long run, an infusion of newly-built homes could benefit the housing market. But there won't likely be a surge in new inventories this year or even next year. Builders cannot develop new homes quickly enough to meet up with customer demand. Over a decade of underbuilding in the new home sector has increased pent-up demand, despite builders' best efforts to increase inventory.

According to the forecast (by realtor.com), home price rise may slow in the future, but it has remained hotter for longer than expected, leading to an upwardly revised prediction of 6.6 percent for 2022. Home sales are slowing, lowering their original 2022 growth forecast to 6.7 percent. While they now predict a significant drop from 2021, if house sales match their forecasts, 2022 sales will be the second-highest since 2007, after only 2021.

The listing price, also known as the asking price, is the amount a seller has marketed a property for, whereas the sale price is the amount it ultimately sells for. Although price growth slows, homes are still more expensive than a year ago. The latest data for October 2022 from Realtor.com shows that the national median home price for active listings declined to $425,000 in October, down from an all-time high of $449,000 in June.

This represents an annual growth rate of 13.3%, a slight deceleration from last month’s growth rate of 13.9%, and down from a peak growth rate of 18.2% in June. The share of homes having their price reduced grew from 10.6% last October to 20.9% this year. The share is now well above 2017 (18.1%) and 2019 (17.0%) levels but is just below the share of price reductions in October 2018 (21.2%).

And, for the week ending November 19, 2022, the median listing price rose by 11% over the last year. The listing price continues to exceed last year’s level by double-digits, marking the 47th straight week at a double-digit pace. However, this week is also the 6th consecutive week of slowing price growth, a trend that has been present in fits and starts since June.

The rate of decline in home price appreciation continues, but at a more modest rate than in prior weeks, as fewer homeowners listed their properties for sale. Despite the decline in new sellers, the number of homes on the market climbed, and their time on the market increased since fewer buyers were able to compete with mortgage rates of 7%.

New listings dropped 17% from a year ago. This is the 20th straight week of year-over-year reductions in house listings, reflecting declining seller confidence. As potential sellers and builders pull back, price growth is slowing as the housing market resets. Supply is falling at pace with buyer demand, preventing an unbalanced excess that may cause a speedier price correction.

Weekly Real Estate Trends — Source: Realtor.com®

Housing Price Trends for 50 Largest Metro Combined Average

In October 2022, active listing prices in the nation’s largest metros grew by an average of 9.2%. Midwestern metros led the charge in active listing price growth, growing by 12.9% on average over the past year. Listing prices in the midwestern and southern metros of Milwaukee (+34.5%), Miami (+25.1%), and Kansas City (+21.4%) grew the most among large metros.

Western metros saw the greatest increase in the share of price reductions (+18.9 percentage points), followed by southern metros (+13.6 percentage points). Homes in Phoenix (+35.9 percentage points), Austin (+31.2 percentage points), and Las Vegas (+24.4 percentage points) showed the greatest growth in the share of homes with price reductions compared to last year.

Region	Active Listing Count YoY	New Listing Count YoY	Median Listing Price YoY	Median Listing Price Per SF YoY	Median Days on Market Y-Y (Days)	Price Reduced Share Y-Y (Percentage Points)
Midwest	12.4%	-15.0%	12.9%	7.9%	+2 days	6.8 pp
Northeast	-1.2%	-17.4%	8.1%	5.0%	+3 days	4.1 pp
South	69.9%	-9.8%	10.0%	8.8%	+6 days	13.6 pp
West	72.1%	-20.6%	5.0%	5.4%	+11 days	18.9 pp

Will Higher Mortgage Rates Crash the Housing Market?

Mortgage rates fell sharply early in the pandemic, reaching historic lows of less than 3% at the start of 2021. The days of sub-3 percent 30-year fixed mortgage interest rates are over. The mortgage rates are rising at the fastest pace in decades. Housing prices are still higher than the previous year despite rising mortgage rates. Mortgage rates are slowing down home prices.

Economists predicted rates to rise by the end of 2022, but the recent surge in rates has many analysts wondering what would happen next. It happened faster than many predicted, with rates on 30-year fixed loans breaking through 5 percent in April to the highest level in more than a decade.

As mortgage rates rise, competition among those who can afford to buy should continue fierce for the time being. The economic recovery, particularly inflation, has been very evident in the late epidemic phases, and we now face a backdrop of mortgage rates rising at the quickest rate in decades. More than two-thirds of mortgage experts surveyed by Bankrate believe rates will continue to rise since inflation is not slowing down quickly.

The Fed has raised interest rates several times this year, and its policy has a direct impact on the interest rates on various mortgage products, specifically adjustable-rate mortgages and home equity loans. Fed policy has fewer repercussions for fixed mortgage rates, which track 10-year Treasury yields more closely. Borrowers will see an end to the historically low rates that typified the period following the 2008 and 2009 global financial crises.

Experts disagree on the direction of mortgage rates in the coming week. 64% of respondents to Bankrate's weekly poll believe that interest rates will increase, while 18% believe that they will decrease and another 18% believe that they will remain the same. It appears that mortgage rates will remain between 7% and 7.5% over the new few weeks. Rates are expected to remain unchanged in this range until the Federal Reserve sees that its monetary policy is decreasing inflation.

As of November 02, 2022, interest rates jumped for almost all types of loans compared to a week ago. The national average 30-year fixed-mortgage rate is 7.22 percent, unchanged over the last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 6.89 percent. The average rate for a 15-year fixed mortgage is 6.46 percent, up 2 basis points since the same time last week.

At the current average rate, you’ll pay a combined $680.14 per month in principal and interest for every $100k you borrow.
Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $869 per $100k borrowed.
Monthly payments on a 5/1 ARM at 5.55 percent would cost about $571 for each $100,000 borrowed over the initial five years
But with adjustable-rate mortgages, it could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

How Mortgage Rates Have Moved in November 2022:

30-year fixed mortgage rate: 7.22%, the same as last week
15-year fixed mortgage rate: 6.46%, up from 6.44% last week, +0.02
5/1 ARM mortgage rate: 5.55%, up from 5.53% last week, +0.02
Jumbo mortgage rate: 7.22%, up from 7.20% last week, +0.02

With inflation blazing and the U.S. economy chugging along, the average 30-year mortgage rate was 7.22 percent this week, no change from the previous week, according to Bankrate's nationwide poll of large lenders. Although the Federal Reserve doesn’t influence rates on fixed mortgages, its recent move to raise the federal funds rate due to inflation — and the indication it’ll continue to raise that rate this year — does have some impact on mortgages. One of the primary challenges that investors and buyers will need to address this year is rising interest rates.

Today's rates are much higher than they have been in years, which is likely to have a few knock-on consequences in the US housing market – though they are unlikely to produce significant declines in housing prices. While quickly rising mortgage rates may dampen the strong housing demand somewhat, do not anticipate a halt to home price appreciation. A slower rate of appreciation is more likely. The impact of higher mortgage rates is not yet fully reflected in the recent sales data but it has given affordability a big hit.

Keep in mind that, despite recent increases, mortgage interest rates are still within reach when seen in historical context (back in 1981, rates topped 18 percent for a 30-year fixed-rate mortgage). If the house you're eyeing is a good fit for your family and won't put you in financial peril, go ahead and buy it. The longer you delay, the more money you'll have to spend on rising rentals and saving for the down payment you'll need to buy a house. It all depends on your financial status and the housing market in the area where you live.

Rising mortgage rates still have the potential to drive a sizable portion of buyers away from the housing market. This year has already seen a significant increase in housing prices. When combined with interest rate increases, it may become too much for many homebuyers. As a result, the first half of the year is likely to see continued high house prices. When inventory increases and mortgage rates rise, the housing market may soften in the second half of 2022 (and in 2023 as well).

Even with rising mortgage rates and higher prices, the housing market would remain a seller's market due to very low supply and increasing demand as more millennials are projected to buy houses in 2022. Now millennials make up the largest share of homebuyers in the US, according to a 2020 survey from the NAR. According to a new study by Realtor.com, buying is more cost-efficient than renting in a growing number of the largest cities in the country.

This is encouraging news for the millions of millennials who are approaching the peak homebuying age. Millennials are the largest generation in history, and they are already in their mid-thirties, approaching their prime home-buying years. They were delayed in purchasing a home, but are now back in full force. Thus, we have two, four, or five years of millennial homeownership.

Sources:

https://www.realtor.com/research/
https://www.zillow.com/home-values/
https://www.bankrate.com/mortgages/todays-rates/
https://www.realtor.com/research/august-2022-data/
https://www.nar.realtor/research-and-statistics/housing-statistics/
https://www.nar.realtor/research-and-statistics/housing-statistics/housing-affordability-index
https://www.realtor.com/news/trends/housing-market-reset-in-buyer-friendly-direction/

Where Are Housing Prices Falling 2022?

November 11, 2022 by Marco Santarelli

Fortune reached out Moody's Analytics to get access to its latest proprietary housing analysis. The financial intelligence business predicted home price changes in 414 markets between 2022 and 2024. Moody's Analytics expects that 210 of the nation's 414 major housing markets will see home prices falling in the next two years and 204 will see home prices rise. 183 of the 413 biggest U.S. home markets are “overvalued” by more than 25%. Boise, Idaho, is 71.7% overvalued, and Flagstaff, Arizona, is 60.6%.

Redfin revealed its “risk score” on Friday, which identifies the home markets that are most vulnerable to a “housing slump.” The greater a market's “risk score,” the more likely it is that house prices will fall year over year. Redfin examined 98 regional housing markets and evaluated indicators such as home-price volatility, average debt-to-income ratio, and home-price growth. Among the 98 markets measured by Redfin, Riverside had the highest likelihood of seeing a “housing downturn.”

It was followed by Boise, Cape Coral, North Port, Las Vegas, Sacramento, Bakersfield, Phoenix, Tampa, and Tucson. Popular migration destinations where home prices soared during the pandemic, such as Boise, Phoenix, and Tampa, are most likely to see the effects of a housing downturn amplified and year-over-year home prices decline if the economy enters a recession, a scenario that some economists believe is likely as inflation persists and stock markets stumble.

<<<Also Read: Will the Housing Market Crash? >>>

Homeowners in those markets who are considering selling should market their properties as soon as possible to avoid price drops. Rust Belt cities like Cleveland and Buffalo, which are still inexpensive, are the most resilient to a housing market crash. The U.S. housing market slowed significantly in the spring due to rising mortgage rates. Redfin studied which metros are most vulnerable to home-price reductions if the country enters a recession and which are most immune to an economic slump.

Recession-proof northern metros, including Cleveland and Buffalo, NY, are relatively inexpensive. Prospective homebuyers in these places can proceed with confidence. Redfin's examination of 98 U.S. metros with relevant data utilizes home-price volatility, average debt-to-income ratio, and home-price growth. Each metro is given an overall risk score relative to the others. 100 indicates the highest possibility of a housing market slump, including home-price decreases, while 0 indicates the lowest.

“Recession fears are escalating, mostly because the Fed has signaled it will continue to raise interest rates to tame inflation and cool consumer demand. Higher interest rates led to surging mortgage rates, which have already cooled down the housing market,” said Redfin Senior Economist Sheharyar Bokhari. “If the U.S. does enter a recession, we’re unlikely to see a housing-market crash like in the Great Recession because the factors affecting the economy are different: Most homeowners have a fair amount of home equity and not much debt and unemployment is low.”

Housing Markets at Risk of Falling Home Prices

If the U.S. enters a recession, Riverside's home market will chill the most. It has the highest danger score of any major U.S. city, 84. It's more likely than other metros to see prices drop year over year during a recession or economic slowdown, according to housing and economic statistics. Riverside, which includes San Bernardino, Ontario, and Palm Springs, has variable house values and was a favorite location during the epidemic for both permanent movers and second-home buyers.

Riverside is followed by Boise (76.9), Cape Coral, FL (76.7), North Port, FL (75), and Las Vegas (74.2).

Sacramento, CA (73.1), Bakersfield, CA (72.2), Phoenix (72), Tampa, FL (70.7), and Tucson, AZ (70.1) round out the top 10.

Many of these housing markets, like Riverside, are popular migration destinations or have quickly growing property prices, both of which increase their likelihood of a housing slump. Boise, Cape Coral, North Port, Las Vegas, Sacramento, and Phoenix were among the 20 fastest-cooling areas in May when mortgage rates reached 5.5%. As the economy continues to decline, prices may fall in many of these metros. Six of the 10 areas most at risk of downturns are among the most popular destinations for Redfin.com users moving from one metro to another.

Maricopa County (Phoenix) and Riverside County gained more residents from other parts of the U.S. than anywhere else in 2021, according to the U.S. Census. The most vulnerable metros have likewise seen an outsized price rise. North Port has the nation's fastest-growing house values, up 30.5 percent year over year in May, followed by Tampa (28.1 percent) and Las Vegas (26.8 percent ). Overall, nine of the ten most vulnerable locations had faster-growing house values than the national median (the exception is Sacramento, however, home prices there rose more than 40% throughout the pandemic, reaching $610,000 in May 2022).

Several of those metros went from inexpensive to unaffordable during the epidemic, owing in part to the migration of individuals from other locations. Among them is Boise, where the typical home price increased from $330,000 to $550,000 between May 2020 and May 2022, and Phoenix, where it increased from $300,000 to $485,000.

“Boise’s market is already turning around, as a lot of the people who moved to Idaho during the pandemic are either moving back to their hometowns or cashing in and moving to more affordable places. The housing market was hot during the pandemic, largely because of out-of-town buyers,” said Boise Redfin agent Shauna Pendleton.

Three at-risk metros are in California and three in Florida. San Jose, Oakland, and San Francisco experienced relatively moderate price increases throughout the epidemic, its people tend to have high salaries and considerable home equity, and their housing markets started falling fast in the first half of 2022, mainly owing to collapsing tech stocks. Not all homes in these metros will lose value. Large single-family houses in spread-out areas are recession-proof.

Housing Markets in Which Prices Are Unlikely to Fall

Relatively affordable Rust Belt metros are most resilient in the face of a recession. In case of a recession, Akron, Ohio has the lowest risk of experiencing a housing decline. It has the lowest total risk score of any major US city at 29.6. Low home-price volatility, a low debt-to-income ratio, a small number of second houses, and the fact that properties in Akron are unlikely to be flipped are some of the characteristics that make the city relatively stable.

With an overall risk score of 30.4, Akron is followed by Philadelphia, Montgomery County, PA (31.4), El Paso, TX (32.2), and Cleveland (32.4). The top ten include Cincinnati (32.6), Boston (32.6), Buffalo, NY (33.1), Kansas City, MO (33.4), and Rochester, NY (34.4). Almost all of those metros are inexpensive and have relatively slow-increasing prices, both of which would benefit their housing markets in the event of a recession.

Almost all of the most resilient metros are located in the northern United States, either in the Rust Belt or on the East Coast. Three of them are in Ohio, two in New York, and two in Pennsylvania. In nine of the ten most resilient metros, prices climbed at a slower rate than the national average (El Paso is the exception).

Seven of the 10 metros least in danger of a housing downturn had a median sale price below $300,000 in May, and nine of them were below the $431,000 national median. Affordability benefits property markets in a recession because more people can buy houses, and such locations may attract out-of-town buyers. Boston is pricey, although property prices climbed modestly throughout the epidemic. It's busy and lost residents as remote work became prevalent.

U.S. Metros Most and Least Susceptible to a Housing Downturn in the Next Recession

Ranked by highest to the lowest chance of a housing downturn. The ranking combines 10 indicators to come up with an overall risk score for each metro, relative to the other metros in this analysis. The highest possible score is 100 and the lowest possible score is 0. The indicators are as follows: home price volatility, average debt-to-income ratio, average home-loan-to-value ratio, labor market shock, percent of homes flipped, how much the housing market is “cooling” compared with other metros, the year-over-year change in domestic migration, the share of homes in the metro that are second homes, year-over-year price growth and elasticity of supply. Each factor is weighted equally.

U.S. Metro Area	Overall Score	Average Home-Loan-to-Value Ratio, 2021	Percent of Homes Flipped in 2021	Rank: How Quickly Housing Market Cooled in First Half of 2022	Net Domestic Migration in 2021, YoY	Share of Second Homes, 2021	Price Growth in 2021, YoY
Riverside, CA	84	83%	4.50%	15	19,204	7.70%	21.00%
Boise, ID	76.9			6	6,782	6.00%	30.90%
Cape Coral, FL	76.7	81%	2.90%	11	7,345	23.40%	23.60%
North Port, FL	75	79%	4.40%	18	8,283	20.20%	23.30%
Las Vegas, NV	74.2	84%	8.30%	12	-15,143	7.60%	18.60%
Sacramento, CA	73.1	81%	5.40%	2	4,157	4.30%	19.30%
Bakersfield, CA	72.2	87%	3.80%	21	6,111	2.50%	17.30%
Phoenix, AZ	72	82%	10.30%	17	-15,530	7.20%	25.40%
Tampa, FL	70.7	85%	7.40%	22	524	8.10%	19.60%
Tucson, AZ	70.1	84%	7.70%	54	-2,677	7.10%	21.50%
San Diego, CA	69.8	81%	5.30%	8	-8,189	3.70%	17.50%
Jacksonville, FL	69.3	85%	7.20%	36	4,136	6.20%	16.60%
Stockton, CA	68.2	84%	4.70%	5	3,578	1.00%	19.30%
Knoxville, TN	67	86%	4.60%	13	4,527	5.20%	18.30%
Orlando, FL	63.8	85%	6.40%	31	-6,536	8.70%	16.70%
Charleston, SC	63.4	85%	3.80%	67	-2,921	7.60%	15.40%
West Palm Beach, FL	63.3	80%	3.10%	30	972	12.00%	17.40%
Fresno, CA	60.6	85%	4.70%	37	2,719	2.90%	17.90%
Raleigh, NC	60.4	83%	8.90%	42	3,430	2.60%	17.50%
Oxnard, CA	59.8	79%	2.50%	28	323	3.30%	16.70%
Salt Lake City, UT	57.7				-3,020	2.00%	22.80%
Columbia, SC	56.9	90%	4.40%		2,296	3.20%
Providence, RI	56.6	85%	2.70%	44	3,664	3.90%	15.40%
Atlanta, GA	56.4	86%	9.90%	47	-4,229	2.20%	19.20%
Miami, FL	56.3	82%	2.90%	53	-5,120	5.90%	18.60%
Charlotte, NC	56.1	85%	10.10%		-6,444	2.70%	16.50%
Virginia Beach, VA	55.8	92%	3.20%	80	864	3.40%	8.30%
Tacoma, WA	55.5			9	-3,571	1.70%	19.80%
Detroit, MI	54.8	87%	5.20%	70	-2,062	1.00%	15.40%
Los Angeles, CA	54.8	79%	4.10%	46	-69,329	1.90%	17.30%
Austin, TX	54.6			16	-8,609	3.90%	31.60%
Portland, OR	54.3	82%	3.70%	14	-17,716	2.30%	15.40%
Anaheim, CA	53.9	76%	4.50%	20	-6,644	3.80%	16.00%
Denver, CO	53.8	82%	6.90%	7	-18,063	2.40%	16.70%
Colorado Springs, CO	53.7	87%	5.00%		693	2.50%
Baton Rouge, LA	52.4	89%	3.00%		2,287	2.40%	9.80%
Greenville, SC	52.1	85%	3.50%	32	1,771	4.70%	14.00%
Winston-Salem, NC	51.9	87%	5.10%			2.70%	13.70%
Grand Rapids, MI	51.7	86%	3.60%	29	1,028	2.40%	15.20%
Greensboro, NC	51.7	87%	6.70%	38	-181	2.10%	11.80%
Warren, MI	50.5	86%	2.90%	35	6,180	1.60%	11.40%
Tulsa, OK	50.1	88%	3.40%	45	2,325	2.10%	12.50%
Fort Lauderdale, FL	49.9	82%	3.00%	72	-5,121	7.50%	13.30%
Fort Worth, TX	49.6			50	1,978	1.70%	18.30%
Nashville, TN	49.3	84%	8.30%	48	-6,093	3.40%	17.00%
Allentown, PA	48.6	87%	2.20%	62	3,722	3.40%	14.20%
Camden, NJ	47.9	88%	3.00%	75	4,300	0.50%	17.90%
Houston, TX	47.7			24	-334	2.90%	15.50%
Seattle, WA	47.6	79%	1.90%	4	-37,365	1.80%	17.20%
Nassau County, NY	47.4	80%	3.60%	58	12,296	4.70%	15.20%
Albuquerque, NM	46.8				-1,714	2.80%
New Orleans, LA	46.6	88%	2.90%	23	-3,930	3.40%	10.70%
San Antonio, TX	46.6			40	-138	2.90%	15.10%
San Jose, CA	46.4	74%	2.50%	1	-22,661	0.80%	13.60%
San Francisco, CA	46.3	72%	1.90%	10	-55,918	2.40%	4.80%
Oakland, CA	45.8	78%	2.60%	3	-23,280	1.00%	16.30%
Dallas, TX	45.4			40	-5,685	1.70%	17.90%
Richmond, VA	45.4	87%	3.70%	59	1,995	1.40%	12.30%
Oklahoma City, OK	45.3	88%	5.10%	52	476	1.70%	10.60%
Washington, D.C.	44.2	87%	2.50%	28	-35,800	1.50%	10.10%
New Haven, CT	44.1	87%	2.00%	82	4,492	1.90%	15.80%
Birmingham, AL	43.4	88%	5.90%	68	95	1.40%	8.40%
Little Rock, AR	43.1	89%	4.90%	43	472	1.80%	10.70%
Frederick, MD	42.9	84%	2.00%	25	-58	0.90%	11.70%
Memphis, TN	42.7	87%	7.50%	33	-535	1.20%	13.30%
Honolulu, HI	42.6	79%	0.50%	19		6.20%	7.80%
St. Louis, MO	42.2	86%	3.40%		-2,214	1.30%	10.10%
Baltimore, MD	41.9	86%	2.60%	74	6,085	1.40%	8.50%
Bridgeport, CT	41.7	81%	1.10%	88	8,871	2.00%	11.60%
Worcester, MA	40.8	86%	1.80%	57	3,354	1.20%	16.10%
Indianapolis, IN	39.9			41	902	1.40%	13.50%
Newark, NJ	39.3	84%	1.90%	73	7,348	2.80%	13.20%
Wichita, KS	39.3				-1,813	1.10%	12.50%
Lake County, IL	38.6	85%	1.80%	87	2,746	1.70%	14.40%
Louisville, KY	38.6	87%	4.80%	34	-378	1.20%	9.70%
Wilmington, DE	37.8	88%	2.80%	64	738	1.80%	11.30%
Hartford, CT	36.8	86%	1.70%	80	7,182	1.80%	12.00%
Minneapolis, MN	36.8	85%	3.70%	50	-10,673	1.30%	11.10%
Gary, IN	36.7				939	1.20%	9.70%
Pittsburgh, PA	36.4	87%	1.60%	76	-337	1.50%	12.70%
Elgin, IL	35.8	84%	1.10%	60	3,590	0.60%	11.50%
New York, NY	35.4	78%	1.70%	48	-2,01,570	2.80%	12.30%
Syracuse, NY	35.2	86%	2.20%		1,510	3.30%	11.00%
Milwaukee, WI	35.1	86%	3.30%	79	-2,993	1.40%	7.20%
Omaha, NE	35.1	87%	4.90%	56	-237	1.30%	9.70%
Albany, NY	34.5	87%	2.00%	90	3,521	2.80%	13.70%
Chicago, IL	34.4	86%	1.80%	70	-32,998	1.30%	11.70%
Columbus, OH	34.2	85%	3.40%	61	2,507	1.40%	13.50%
Rochester, NY	34	85%	2.00%	86	1,330	3.20%	12.60%
Kansas City, MO	33.4				-1,491	1.30%	10.90%
Buffalo, NY	33.1	86%	2.60%	78	1,877	1.40%	17.00%
Boston, MA	32.6	79%	1.20%	63	-23,964	2.80%	12.20%
Cincinnati, OH	32.6	87%	3.90%	84	-360	1.30%	13.90%
Cleveland, OH	32.4	86%	2.50%	71	225	1.20%	9.50%
El Paso, TX	32.2			89	-24	1.80%	13.90%
Montgomery County, PA	31.4	83%	1.80%	66	6,685	0.80%	11.00%
Philadelphia, PA	30.4	86%	2.00%	64	-15,721	1.40%	10.10%
Akron, OH	29.6	87%	2.70%	83	2,029	1.20%	7.90%

Source: https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/

Where's Housing Headed? Follow Rents

February 17, 2010 by Marco Santarelli

It may not be the most widespread measure of housing prices, but if you want to follow a powerful driver, look at rents.

Specifically, it's the rents Americans pay on condos, apartments or houses that are about the same size, and share the same neighborhood as your ranch or colonial, that in the end determine what your house is worth.

"If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure," says Yale economist Robert Shiller.

In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

Before we get to the numbers, let's examine why rents exercise a kind of gravitational pull over home prices.

[Read more…]

Further Home Price Declines Forecast Despite Recent Gains

October 27, 2009 by Marco Santarelli

Contrary to popular opinion, home prices have not bottomed out, according to the financial information and analysis firm Fiserv.

The firm projects median home prices will drop 11.3 percent by June 30 of next year. It predicts declines in 342 of 381 markets over the next year. Only then will prices stabilize, and rise 3.6 percent in 2011, the firm predicts.

The S&P/Case-Shiller Home Price Index had seemed to indicate prices had already stabilized. The composite index of 20 cities rose in May, June, and July, and home prices gained 3.6 percent nationwide.

But it now looks like that may have been a blip due to the impact of the tax credit for first-time homebuyers, analysts said. By the end of November, when it expires, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break.

In Fiserv’s latest forecast, the markets that will have the steepest declines are those with the greatest number of foreclosures. [Are these new opportunities for real estate investors?]