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The US housing market’s deep freeze is likely to accelerate next year and result in the first year-over-year decrease in home prices in a decade, according to experts at real estate firm Redfin.

The median US home sale price is projected to fall 4% to $368,000 in 2023, according to Redfin’s forecast for the upcoming year. The decline will make the first annual drop in home prices since 2012.

The prices declines will begin during the first quarter as owners closed deals on homes that went into contract at the end of this year, deputy chief economist Taylor Marr said in a blog post. Home prices have already begun to fall on a month-over-month basis in many markets.

“Prices would fall more if not for a lack of homes for sale,” Marr said. “We expect new listings to continue declining through most of next year, keeping total inventory near historic lows and preventing prices from plummeting.”

Booking.com

Home prices are expected to fall most precipitously in so-called “pandemic boomtowns” that attracted buyers in 2020 and 2021. Cities most at risk include Austin, Texas; Boise, Idaho; and Phoenix, Arizona.

 

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