Des Moines home prices projected to decrease 2023

Home prices in the Des Moines metro are projected to fall by nearly half a percentage point next year, according to Zillow estimates.

Driving the news: Existing home sales nationwide have fallen for nine straight months as mortgage rates continue to rise and people are boxed out of the market due to lack of affordability.

• 30-year mortgage rates are hovering around 6%, according to NerdWallet. They were around 3% in December 2021.

Yes, but: Midwest home prices are mostly protected from the dramatic increases and decreases that are experienced in larger cities, said Gina Swanson, a local realtor with CENTURY 21 Signature Real Estate.

Zoom in: Several COVID-related real estate trends that influenced prices in larger cities didn't happen here:

• There were no major moves in or out of the DSM metro during the beginning of the pandemic.

Plus: There was also a surge of people buying second homes in early 2020 when interest rates were at record lows, resulting in price spikes. But that wasn't a common trend in Des Moines, Swanson said.

Between the lines: While prices did quickly increase in Des Moines in recent years, they're nothing in comparison to cities like Chicago.

• The median home sale price in the Des Moines metro was $262,500 for October 2022, according to the Des Moines Area Association of Realtors.

What's next: Housing inventory is growing in Des Moines, but it's still low in comparison to the number of buyers, Swanson said.

The bottom line: Homes are still selling, but people who are overpricing their properties are realizing they need to drop them as the market stabilizes, Swanson said.