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2023 Housing Forecasts
Towards the end of each year, I collect some housing forecasts for the following year.
For comparison, new home sales in 2022 will probably be around 640 thousand, down from 771 thousand in 2021.
Total housing starts will be around 1.55 million in 2022, down slightly from 1.60 million in 2021.
Existing home sales will be around 5.1 million in 2022, down from 6.1 million in 2021.
As of September, Case-Shiller house prices were up 10.6% year-over-year, but the year-over-year change is slowing rapidly.
The table below shows several forecasts for 2023 (JBREC through 2024 as noted below):
Update: Corrected Freddie Mac is based on Freddie Mac HPI.
Fortune’s Lance Lambert has more house price forecasts in A 20% home price decline? 7 forecast models are leaning crash—here’s where the other 13 models have the 2023 housing market going
Here is Lance’s tweet on the JBREC’s forecast:
There is an especially wide range in the forecasts for house prices and shows the difficulties in modeling this housing cycle. My view is house prices will decline in 2023 and will fall 10% or more from peak-to-trough (see House Prices: 7 Years in Purgatory). Here is an updated graph from that post showing the long cycles for housing:
The real return following the ‘79 peak was 6.5 years. It took 11 years for real prices to reach the previous peak following the peak in ‘89. And it took 14.5 years to return to the real peak reached during the housing bubble.
Hence the title to the post: House Prices: 7 Years in Purgatory (it could take shorter or longer, especially since the next Housing and Demographics: The Next Big Shift will likely start at the end of this decade).
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