Real Estate Exchange Throws Shade On Housing Market, Expects Industry To Struggle

Zillow Group Inc (NASDAQ: ZG) is out with its home value and sales index for the month of November, which forecasts a pullback in both sales and values. Here’s what you need to know if you’re a potential buyer.

What happened: According to Zillow’s prediction, home value growth will continue to slow down over the upcoming months.

The Zillow Home Value Index, which increased 11.9% in the year that ended in October, is predicted to increase by just 0.8% in the upcoming year. Zillow stated that compared to last month’s forecast of a 1.2% annual growth, the long-term outlook is marginally worse.

Read also: Mortgage Payments Have Increased A Staggering 50% From One Year Ago

Expectations for further drops in the volume of home sales in the upcoming months are a major factor in this negative estimate. A poorer prediction for home sales results in more inventory and, thus, a quicker decline in home values, which causes the downward adjustment.

Zillow projects that 5.1 million existing houses will be sold in the calendar year 2022, a 16% decline from 2021. This is a little less than the 5.2 million expected from September.

It is anticipated that decreased sales will be caused by high mortgage rates and significant affordability issues into 2023.

Why It Matters: In addition to making monthly payments unaffordable for potential buyers, the high interest rates had a lock-in effect on homeowners which kept residents in their current properties. Home prices remained largely unchanged as both buyers and sellers withdrew from the market.

If you’re a potential buyer struggling with higher costs, Benzinga has more options for you. Here’s how to invest as little as $100 in a rental property (or more, depending on your appetite) to earn passive income.

Read next: Can’t Beat ‘Em? Retail Investors Now Backing Institutions Competing For Control Of The Single-Family Rental Market

Zillow projects typical US home values ​​to fall 0.6% from October 2022 to January 2023, before recovering and posting 0.8% growth by the end of October 2023.

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