- Zillow’s housing market outlook has been revised down from April. Zillow forecasts 11.6% dwelling worth progress over the subsequent 12 months (Could 2022-April 2023).
- 5.73 million current dwelling gross sales are anticipated in 2022, in keeping with Zillow’s newest forecast, a 6.4% lower from 2021.
Zillow’s dwelling worth forecast requires a gradual slowdown in annual dwelling worth progress from the present tempo of 20.9% to 11.6% progress by April 2023. That’s down from a year-ahead forecast of 14.9% progress made in March. Over the subsequent three months, Zillow expects dwelling values to develop 5.2%, down from an expectation for five.5% progress within the earlier month’s forecast.
Zillow’s forecast for current dwelling gross sales has been lowered as properly, now predicting 5.73 million gross sales in 2022. That may mark a 6.4% lower from 2021.
These downwardly revised projections would nonetheless symbolize a really sturdy housing market within the coming 12 months. Within the historical past of the Zillow Residence Worth Index, which dates again to 2000, annual progress has solely exceeded the present year-ahead projection of 11.6% throughout this latest run of record-breaking progress, and through a several-month stretch in 2005. And whereas 5.73 million current dwelling gross sales could be a lower from a remarkably sturdy 2021, that will mark the second-best calendar 12 months whole since 2006.
Spiking mortgage charges, stock good points, and lower-than-expected pending dwelling gross sales and mortgage software knowledge drove the downward revision.
Labor market circumstances will likely be carefully monitored within the coming months as future forecasts are launched. Present labor market circumstances are sturdy, however the impression of anticipated price hikes from the Federal Reserve is unsure. Continued power within the job market would hold strain on housing demand and thus dwelling worth progress.