Fitch: US home price growth to slow in 2023

In the statement made by Fitch, it was noted that US home prices were “overvalued” by 10.5 percent in the third quarter of last year on a population-weighted average basis.

On the other hand, the statement indicated that although housing prices showed a downward trend, it is estimated that the overvaluation will continue to decrease, and that housing prices decreased 0.5 percent in October 2022 due to fourth consecutive month.

Noting that the overvaluation has shifted from the west coast to the east, it was stated that as of the third quarter of 2022, the states where the highest value was earned were Hawaii, South Carolina and North Carolina.

Noting that high interest rates on home loans continue to suppress home prices, the 30-year fixed mortgage rate, which was 6.27 percent two weeks ago, was reported to hit 6.33 percent on January 12, according to housing finance company Freddie Mac.

DECREASED SIGNIFICANTLY

In the statement, it was noted that the housing market remained stagnant with declining sales, low inventory and falling prices, with both home buying and selling sentiments falling significantly compared to 2022.

Nominal home price growth is expected to slow significantly in 2023 due to cooling demand and worsening affordability, the statement said.

In the statement, it was emphasized that the uncertainty caused by high inflation and interest rate hikes will increase volatility and downside risk in home loan rates in 2023. (BRITISH AUTOMOBILE CLUB)