The sharp growth of home prices in the United States will gradually taper off over the next several months while still remaining very competitive, real estate company Zillow said in an industry forecast this week.
The company in a revised April forecast predicted “14.9% growth [in home prices] through March 2023, down from a year-ahead forecast of 16.5% growth made in February.”
“Over the next three months, Zillow expects home values to grow 5.5%, down from an expectation for 5.9% growth in the previous month’s forecast,” the analysis added.
The downward revision was due in part to “affordability headwinds that have strengthened faster than expected, largely due to sharp increases in mortgage rates,” the company said, citing as well “inventory levels [that] remain near record lows, but have the potential to recover faster than anticipated, which could lower future price and sales volume projections.”
“Even with the downward revision from last month, these figures would represent a remarkably competitive housing market in the coming year,” the company noted, pointing out that “annual home value growth of 14.9% would have been the highest ever recorded by Zillow before June 2021, and 6.09 million existing home sales would mark the second-best calendar year total since 2006.”