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US home prices are set to fall by 5% next year in line with substantial price falls in housing markets across the globe, according to a new report by Fitch Ratings.

The ‘Global Housing and Mortgage Outlook – 2023’, which analyzed housing markets in 15 countries across North America, Europe, the Asia-Pacific region and Latin America, predicted that house prices in the US will fall by between 0% and 5% in 2023. 

In addition, housing demand in the US will continue to decline, leading to a further erosion of home prices.

The report said: “Regions that experienced the largest home price gains since the pandemic are expected to incur declines more severe than the national average.

“Risks to the projection include rates rising above 7% as well as sellers pulling homes from the market, further limiting supply.”