Housing Outlook: This Is How Far US Home Prices Could Fall in 2023

Table Of Content

• Watch: Millions of homes could flood the US housing market thanks to boomers
• March: Annual House Price Inflation Remains On Downward Path, Says ONS
• When could home prices could fall in 2024?
• June: Rightmove Reports Record Average Property Price
• February: Halifax: House Prices Continue Upward – But Rate Of Growth Slowing
• April 25: Rightmove Reports Record Average Prices Topping £360,000

August’s price rise was described as “relatively modest” by the lender compared to the average figure of 0.9% recorded over the past year. The move is intended to ensure that the threshold for paying tax reflects the rise in property prices over the last two years, according to the Welsh Government. It will mean an estimated 61% of homebuyers will not pay tax on their purchase from 10 October. Having lagged behind in recent years, the biggest monthly rise at 1.9% was in London where average asking prices stand at £695,642. The annual rate of growth for October at 7.8% has slowed from the 8.7% reported in September, while the latest 0.9% monthly rise is less than Rightmove’s five-year average for October at 1.2%. With a figure of 14.6%, Wales recorded the highest growth in the year to August, followed by England (14.3%), Scotland (9.7%) and Northern Ireland (9.6%).

Watch: Millions of homes could flood the US housing market thanks to boomers

Average prices in Scotland stood at £194,000 in November 2023, according to the ONS and average prices in Northern Ireland were recorded at £180,000 for September 2024. Nationally, the average property price stands at £257,656, up from £257,443 in December but down from £258,297 this time last year. This is because buyers now have more time to consider which property is right for them, says Rightmove, which makes it important for sellers to price realistically and stand out from the competition.

March: Annual House Price Inflation Remains On Downward Path, Says ONS

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With the economic landscape holding steady, the main difference over the past month is in the rates outlook and when the Federal Reserve may start easing. To be sure, a less aggressive trajectory for home-price gains sounds like good news for prospective buyers. But when combined with still-limited inventory and higher-for-longer rates, the overall picture isn’t a major improvement. Nationally, the stubborn mortgage highs caused new listings to fall 6% month over month in March, marking the biggest drop since January 2022, Redfin said.

When could home prices could fall in 2024?

But prices in the country have increased the most of any region annually at a rate of 4.2%. The number of sales agreed in March is 13% higher than at the same time last year, Rightmove says, with buyer demand up 8% year on year. This could be due to asking prices being £4,776 under the peak seen in May last year, and a softening in mortgage fixed rates, which has boosted buyer confidence.

This is the highest since March 2020, when it stood at 42,700, although it is well down on the 12-month average up to February 2020 of 49,100. On Monday, the Bank said mortgage borrowing in October had fallen to its lowest level since July (see story below). The Bank of England will announce on December 16 whether it will increase the Bank rate, which heavily influences mortgage borrowing rates, from its current historic low of 0.1%. Latest analysis from the BoE shows that mortgage debt to income has stabilised since the measures were brought in, suggesting that the restrictions protect against an increase in household indebtedness. At its last rate-setting meeting of 2021, the central bank’s Monetary Policy Committee (MPC) voted 8-1 to raise the rate from its historic low of 0.1% by 0.15 percentage points. With city workers slowly returning to offices, the property portal added that demand for flats is at its highest level for five years.

Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates. London’s average property price remains the highest in the UK at £537,000, despite annual price falls of 1.1% in the 12 months to September. The most resilient regions are Scotland (house prices are unchanged annually at £203,116) and Wales (prices down by 1.5% and average prices are £215,787). Annual property price inflation has been gradually slowing since July 2022, when annual price inflation was at 13.8%.

February: Halifax: House Prices Continue Upward – But Rate Of Growth Slowing

London recorded an annual decline of 2.6% (the average property price is £533,057). This is London’s weakest house price performance since October 2009 and a drop of around £15,000 over the last year. Halifax’s data suggest some resilience in the new build property market with annual price growth up by 1.9%. That said, growth has continued to slow, and has dropped to its lowest level in more than three years. According to Nationwide’s analysis, purchasing a typical first-time buyer property with a 20% deposit would swallow 43% of an individual’s take home pay – assuming they earned the UK average wage, and secured a mortgage rate of 6%. Higher mortgage rates are continuing to put pressure on the housing market, with first-time buyers and movers reassessing their position.

It also remains to be seen how the wider economy will respond to the withdrawal of government support measures. You can use our interactive rates calculator to find deals for your exact requirements. Additionally, the interest charged may be higher than for normal residential mortgages because of the risks involved. He added that the ‘full house’ is an ‘extremely rare’ event, seen for the last time since March 2007.

April 25: Rightmove Reports Record Average Prices Topping £360,000

England showed a north/south split on house price performance, with northern regions showing the healthiest growth in prices. Annually average property prices are up 3.7% in the North West, the strongest performing region in England. In some metropolitan areas, median list prices overall are falling from their June highs. These are the places where buyers can find relative deals compared with a few months earlier and where there are generally more homes for sale. Of course, it's hard to say with certainty what will happen in the coming months and years.

It described July’s reverse as a “modest fallback”, saying this is unsurprising given the significant gains recorded in recent months. According to the Nationwide House Price Index, annual house price growth rose to 11% in August 2021 with the average home valued at £248,857. Nationwide added that house prices are now about 13% higher than when the pandemic began. It says house prices are now almost 15% above the level prevailing in March last year, when the pandemic struck the UK and the housing market was locked down for two months.

Inventory did improve slightly, rising 4.7% month to month to 1.11 million homes for sale at the end of March. Regionally, sales fell everywhere except in the Northeast, where they rose 4.2% month to month. “For the second consecutive month, all cities reported increases in annual prices,” Luke said. San Diego once again led the pack, achieving double-digit growth with an 11.2 percent jump.