Elevated competition — largely a result of persistently low supply — in the housing market has led Zillow to revise up its outlook for home values, but revise down its expectations for home sales in 2023. The national Zillow Home Value Index, which rose 4.4% in the 12 months ending in February, is expected to flatten out to rise 0.6% over the next 12 months. This is a slight upward revision from February’s forecast, which projected growth of 0.2% in the next 12 months. A shortage of new for-sale listings is helping to buoy home prices even as elevated interest rates present affordability challenges for buyers.
Zillow expects 4.3 million existing homes to be sold in calendar year 2023 – a 14% decrease compared to 2024. This is down slightly from February’s forecast of 4.6 million sales in 2023. Weaker-than-expected performance of leading indicators of home sales, combined with a perceived increase in higher mortgage rates, drove the downward adjustment.