Most housing analysts expected 2023 to be a rough year for the U.S. housing market. In fact, among the 29 major housing forecast models, 24 forecasted a national home price decline for 2023.
But so far, it hasn't exactly come to fruition.
Through the first few months of 2023, the U.S. housing market continues to show signs of stabilization. Existing and new home sales have inched up a bit this year, and homebuilder confidence has improved. And firms like Zillow, CoreLogic, and Black Knight have all reported positive month-over-month home price increases this spring.
What's going on? For starters, housing affordability has improved this spring as the average 30-year fixed mortgage rate, which topped out at 7.37% in November, came back down to around 6.5%. Additionally, a lack of homes for sale, coupled with the market entering its busier spring period, has—at least for now—pushed the national housing market back into equilibrium.
Among the 1,563 California ZIP codes tracked by Zillow, 6.7% saw a home price increase between December 2022 and March 2023. The other 93.3% of California ZIP codes saw a home price decrease during that three-month window.
That said, under the hood, the housing market isn't exactly normal just yet: Some housing markets are booming right now while other places are still passing through a home price correction. And even within a particular market, it can vary a lot.