Home sales activity is expected to dip in the Chicago area next year, while prices will continue to grow, according to Realtor.com’s 2023 housing forecast.
The projected year-over-year change in home sales transactions in the Chicago-Naperville-Elgin region is -2.1%, while the expected price change on the typical home is 3.1%.
Nationally, home prices and inventory, rents and mortgage rates will increase, while real estate transactions will decrease, according to Realtor.com.
The projections say mortgage rates will increase to 7.4% early in the year and retreat to 7.1% by year end. The median price for existing home sales is projected to increase 5.4% and rents will hit new highs with a 6.3% increase, adding to budget pressures for potential first-time homebuyers, the report said.
Year over year, home sales are projected to drop 14.1% and inventory of homes for sale, which has been scarce in most markets for the last two years, will increase 22.8%.
The housing adjustment period could last into 2025, Realtor.com said, but the change ahead will not resemble the recession of 2008, which took years of recovery. The rate of homeownership is expected to hold in 2023, the report said.
“Compared to the wild ride of the past two years, 2023 will be a slower-paced housing market, which means drastic shifts like price declines may not happen as quickly as some have anticipated,” Danielle Hale, chief economist for Realtor.com, said in a news release. “It will be a challenging year for both buyers and sellers, but an important one in setting the stage for home sales to return to a sustainable pace over the next two to three years.”