Home prices will fall for a brief period before trending higher, according to Black Knight analyst Andy Walden. That’s because housing stock levels are plunging, recently falling to their lowest level since April 2022. “Even with demand suppressed, I think you’re going to continue to see prices firm up and trend higher,” Walden told CNBC. Loading Something is loading.
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US home prices are likely to drop for a brief period over the next few months before slumping inventory levels revive the housing market, according to Black Knight’s Andy Walden.
“I think [the rate of house-price growth] starts to inflect here over the next couple of months,” the mortgage data provider’s vice president of enterprise research told CNBC’s “The Exchange” Tuesday.
“I think we get below 0% for a very, very small handful of months here and then you see that start to trend higher,” Walden added.
The total number of US homes for sale suffered its biggest slump since April 2022 last month, according to a Redfin report published Thursday.
Economists believe that the slump in supply could drive up prices – even though a combination of stagnating growth and a surge in mortgage rates has weighed on demand for housing.
“There’s just not enough supply out there – so even with demand suppressed, I think you’re going to continue to see prices firm up and trend higher over the next few months,” Walden told CNBC.
The Black Knight analyst isn’t alone in predicting that low inventory levels will revive the housing market.
Zillow’s chief economist Skylar Olsen said last week that she’s expecting home prices to have risen 5% year-on-year by the end of 2023, due to the rapid fall in supply.
Declining inventory “is a big, huge, massive part of the picture,” she told CNBC last Monday.
“Only two months ago, before we saw these radically low new listings numbers, we were forecasting something much more like 1.2%, something small,” Olsen added. “Now, 5% – that’s on the hotter side of steady and stable.”
Read more: Low housing supply could squeeze home prices up 5% in 2023 even though mortgage rates have spiked, Zillow economist says