Redfin's 2023 housing predictions

• The number of homes sold in the U.S. is expected to decline about 16% in 2023 over 2022 to the lowest level since 2011. The company cited high mortgage rates, still-high home prices, persistent inflation and a potential recession as causes for the slowdown.
• By the end of 2023, mortgage rates are forecast to drop below 6%.
• The U.S. will likely avoid a wave of foreclosures because many current homeowners have low fixed mortgages and a decent amount of home equity, Redfin's deputy chief economist Taylor Marr said in a press release.

Zoom in: The trend is already playing out in Seattle. There were 693 homes sold here in October, a 42.3% decline year-over-year, according to Redfin. The median local sales price that month was $845,000.

The intrigue: Rent prices will also drop, Redfin says, leading prospective millennial and Gen Z buyers to upgrade their apartments instead of buying houses.

• The declines will be partly due to increasing supply, with multifamily construction at a 50-year high, and hundreds of thousands of new units available next year.