Moody’s vs. Zillow: Per-Company Home Price Projections in 2023 for Over 300 Regional Housing Markets

For 124 consecutive months, it stretched to the bottom of the March 2012 housing crash by Housing pandemic boom In June 2022, home prices in the United States recorded positive month-on-month growth. That streak, of course, was broken thanks to last year Mortgage rate shock: During October, US home prices measured in sack schiller Fell for four consecutive months.

from direction US home prices down 2.4% through October 2022 Still light. On the other hand, economists and analysts remain sharply divided On whether or not this is just a minor setback for home price growth Early innings to correct more severe.

It includes the relatively bullish crowd Zillow. The latest housing forecast from Zillow economists US home values ​​have plummeted 1.1% between November 2022 and November 2023.

Meanwhile, the relatively bearish camp includes companies like Moody’s Analytics. Its forecast is for national housing prices to decline by 5.1% between the fourth quarter of 2022 and the fourth quarter of 2023. Moody’s predicts that US house prices will drop by 10%..

Keep in mind when a group like Zillow or Moody’s Analytics say “US house prices,” they’re talking about an aggregated view of the country. In regional housing markets—well, in every neighborhood—results can vary greatly.

To better understand Zillow and Moody’s own forecasts, let’s dive into their regional price forecasts.

divided. That’s the only word that best describes Zillow’s 2023 outlook for the US housing market.

Of the 897 markets measured by Zillow, 658 expect to see house prices fall between November 2022 and November 2023. This includes markets like San Jose (expect -7.2%); Grand Forks (-6.7%); Odessa, Texas (-6.4%); San Francisco (-6.1%); and Santa Rosa, California (-5.3%).

Meanwhile, Zillow expects 239 markets to see positive or flat home price growth between November 2022 and November 2023. This includes markets like Atlantic City, NJ (+4.2% forecast); Homosassa Springs, Florida (+4.2%) and Yuma, Arizona (+3.7%).

“Mortgage rates peaked above 7% as normal seasonal trends put the housing market into a deep freeze in November, sending rates down slightly as sales volume further declined. But significant declines in mortgage rates [down to 6.15% as of Thursday]…and the promising data showing a fall in inflation all give reason for cautious optimism that the worst is behind us when it comes to borrowing costs, and some deterrent homebuying demand from this fall may return in the new year. This possibility, along with inventory that remains low by historical standards, provides the basis for Zillow’s forecast to continue to rule out the possibility of double-digit price declines in 2023 for the nation as a whole,” economists wrote for Zillow in December.

Of the 322 regional housing markets analyzed by Moody’s, 178 are expected to see a decline of at least 5% in housing prices between the fourth quarter of 2022 and the fourth quarter of 2023. This includes markets such as Morristown, Tenn. (-10.3% projection), Pocatello, Idaho (-9.9%), Muskegon, Michigan (-9.7%); Boise (-9.5%), and Santa Cruz, California (-8.8%).

Why are these particular markets at risk? Mark Zandi, chief economist at Moody’s Analytics, says those markets Very far from the basic basics During the housing boom pandemic.

“Affordability has evaporated and with it the demand for housing,” Zandi said He said recently luck. Prices seem less stable [right now] than it was historically. It comes down to the fact that they ran too fast [during the pandemic]and sellers are willing to drop their price here quickly to try to close a deal.”

While Moody’s expects sharper corrections in markets like Boise and Phoenix, the company believes markets like Baltimore (forecast -2.3%) and Chicago (foreign -2.6%) will fare better. Recent markets, according to Moody’s, are not “Massively overrated.”

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