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If you’ve been waiting for prices to drop to buy a home, 2023 could be your year. .
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House prices in October 2022 will be 38.1% higher than they were in March 2020, when the pandemic began, according to Fortune data. However, according to the Case-Schiller National Home Price Index, prices began to fall in November 2022, with prices down 2.4% from their peak in June 2022. Experts predict another 10% to 15% decline by the second or third quarter of 2023, according to multiple sources.
Several other factors point to further corrections in house prices. US housing construction fell for the third straight month in November, according to Reuters. Single-family housing starts fell 4.1 percent last fall, according to a Department of Commerce report.
In addition, institutional investor YieldStreet has cut buying levels by 90%, and Blackstone-owned Home Partners of America has also delayed purchases. [home buying] strategy,” Yieldstreet’s Tejas Joshi told Fortune.
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Real estate supply remains ‘relatively low’ despite falling house prices
As Macro Trends Advisors founding partner Mitch Roschelle told Fox’s business, housing supply is still “relatively low,” with 3.3 months of supply in the market.
Economic uncertainty and rising unemployment could hasten a housing market downturn, creating the largest housing adjustment since World War II. The current correction is the second largest in the post-World War II economy, after the 2008 housing market crash and mortgage crisis.
As an overview, even if house prices fall by 20% by 2023, they will not return to pre-pandemic levels.
“[W]What we’re doing is giving back at most a third or a quarter of the profits we realize,” Roschelle told Fox Business. “But that doesn’t help anyone who just bought a home at the top of the market and has 10 percent of what they’ve lost.”
Those buyers may be stuck for the time being. Alternatively, you may consider renting out the property or renovating your home to increase its value before you sell it.
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This article originally appeared on GOBankingRates.com: 2023 housing adjustment could be biggest since World War II
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