U.S. home prices have been rising pretty consistently over the past decade, more than doubling during that period. That’s why housing is considered a good investment — “safe as houses,” as the English say.
Sharp declines in home prices are rare, with the last big drop coming following the 2008 housing crash. Analysts are now warning that prices are on track for the biggest fall since that time.
- Morgan Stanley expects home prices to fall seven percent by the end of 2023.
- Goldman Sachs expects prices to fall as much as 10% — after previously predicting a 1.8% increase.
- Moody’s Analytics also says prices could drop by up to 10% — with some currently hot markets seeing crashes of 25% or more.
- Fitch Ratings says the overall decline could near 15%.
And while the coming decline will hurt current homeowners, it’s not necessarily a great time for buyers, either.
The average rate on a 30-year fixed mortgage is now 6.82%, the highest since the 2008 crash. That’s up from 5.20% just one month ago and just 2.87% one year ago.
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