• Zillow’s latest forecast calls for home values to appreciate by 5.8% in 2023. Limited for-sale inventory continues to push home prices upward even as mortgage rates remain elevated 
• Zillow forecasts 4.2 million existing home sales in 2023, a 17% decline from 2022.

Zillow’s forecast of the nation’s typical home value was revised upward this month as tight inventory conditions continue to place upward pressure on home prices, despite persistent affordability challenges. Zillow forecasts the national Zillow Home Value Index (ZHVI) to end 2023 5.8% above where it began the year. That’s an upward revision from last month’s forecast, which called for 5.5% growth in 2023. Typical home values are predicted to rise 6.5% from July 2023 through July 2024. 

Just over half as many homes were listed for sale in July compared to the same month in 2019, and 29% fewer new listings entered the market in July than what was typical this time of year prior to the pandemic. This shortage has buoyed competition for the homes that are for sale. Homes that went under contract (or “pending”) in July did so in 12 days – a week and a half faster than what was typical in 2018 and 2019. 

The tight inventory conditions and the persistence of elevated mortgage rates are also expected to continue to limit sales volume in the months to come. Zillow expects 4.2 million home sales to occur in 2023, in line with previous vintages, which would represent a 17% decline from 2022.