Homesellers should prepare for the housing market to swing firmly in the favor of buyers before the end of 2023, according to a panel of 107 economists and housing experts.

A majority of experts on the panel, surveyed by Zillow, agreed that rising mortgage rates are driving down competition among homebuyers, which will eventually result in a buyers’ market taking firm by the end of next year.

The panel also observed that home price appreciation is slowing as a result of high mortgage rates, and it predicted that rental price growth will come to outpace inflation as potential homebuyers priced out of homeownership exert more pressure on the rental market.

After the frantic rush for real estate over the past two years, buyers are finally seeing a calmer market. Those still able to afford homeownership are quickly regaining lost leverage, but this shift to a more balanced market is still in its early stages. Home shoppers priced out of the market are in a tight spot, though, as high and rising rents could cut further into their ability to save up for a down payment.

Fifty-six percent of the panel expected a significant shift in buyers’ favor sometime next year. Twenty-four percent predicted that the shift would come in 2024, 13 percent expected it to come in 2025 and 8 percent expected it after 2025.

While the market has cooled, it’s still far from where it was pre-pandemic. According to Zillow’s most recent market report, the typical listings time on the market, while rising, is still 11 days shorter than it was in 2019. While inventory is ticking up, it remains 42 percent lower than it was in 2019.

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