Heading into 2023, the top economists in the country lined up behind a shared theme: the housing market was cooling off, and buyers might finally catch a break. National Association of Realtors Chief Economist Lawrence Yun predicted a sales decline near 7% with home values barely moving. Bright MLS, Lending Tree, and Realtor.com economists echoed that caution, forecasting slower price growth, elevated mortgage rates, and a market drifting back toward “normal.” I made my own call at the time too, betting that Montgomery County would hold up better than the national numbers suggested. Looking back now, it’s worth asking: how much of that actually played out, and what does it teach us about reading market forecasts today?

What did economists predict for the 2023 housing market?

Four of the country’s leading housing economists all pointed toward a slower, more balanced market in 2023, though none of them predicted a crash. Lawrence Yun, Chief Economist for the National Association of Realtors, forecasted a nationwide sales decline of roughly 6.8% compared to 2022, alongside a nearly flat 0.3% increase in home values. He noted the country would likely split down the middle, with some regions seeing modest gains and others slipping slightly, and he singled out California, especially San Francisco, as the area most likely to see steep double-digit declines.

Lisa Sturtevant, Chief Economist at Bright MLS, took a similar stance, describing 2023 as a “correction” year where the market would start behaving more normally after two years of frenzy. She predicted mortgage rates would ease gradually over the course of the year, eventually settling just under 6%.

Why did economists think 2023 would be tough for buyers?

Economists agreed that affordability, not price collapse, would define the year for buyers. Jacob Channel, Chief Economist for LendingTree, was blunt about it: even with mortgage rates potentially stabilizing and some room to negotiate compared to the height of the pandemic, buying a home in 2023 would still be far from easy. His reasoning came down to two stubborn factors: mortgage rates weren’t going to drop back to 2021 levels, and inventory would stay tight. Channel was also careful to note that home values wouldn’t necessarily fall everywhere, pushing back against the idea of a broad, uniform price drop.

Danielle Hale, Chief Economist for Realtor.com, added a wrinkle worth remembering. After years of an unambiguous seller’s market, she expected 2023 to feel more like “nobody’s market.” She projected a striking 22.8% jump in nationwide inventory, but was careful to explain that the growth would come mostly from homes sitting on the market longer, not a flood of new listings. Her takeaway for buyers: more inventory and fewer bidding wars, but not enough of a shift to call it a true buyer’s market.

Did these predictions hold up nationally?

Broadly, yes. The four forecasts turned out to be directionally accurate, and that’s the real lesson here. Sales activity did slow meaningfully in 2023, mortgage rates stayed stubbornly elevated well above the 2021 lows even as they eased off their late-2022 peak, and the aggressive bidding wars of 2021 and early 2022 did calm down in most markets. Where the predictions were less precise was in the specifics; the national price picture ended up more resilient than the near-flat forecast Yun offered, and inventory growth nationally landed short of Hale’s 22.8% projection in a lot of markets. That’s a pattern I see almost every year: the direction experts call is usually right, the magnitude is where forecasts tend to miss.

How did Montgomery County perform compared to the national forecasts?

Montgomery County held up better than the national predictions, which is exactly what I expected going in. I said at the time that the DMV isn’t recession-proof, but it’s better insulated than most of the country thanks to a strong job market and consistently high-demand schools. That held true. Where I disagreed most with the national experts was on inventory. Hale’s 22.8% nationwide inventory increase never came close to materializing here. Homeowners sitting on 3% mortgage rates simply weren’t willing to trade up into 6-7% rates unless they had no choice, which kept our local inventory tight throughout the year.

What actually drove Montgomery County’s 2023 market?

Two forces shaped the local market more than anything in the national forecasts: a shift toward “have to” sellers and a wave of buyers coming off the sidelines. I predicted we’d see more “have to” sellers than “want to” sellers in 2023, meaning people moving because of a job relocation, a death, a divorce, or a financial hardship, rather than sellers who were simply ready for a change. That played out largely as expected, and it’s a big part of why inventory stayed low even as rates climbed. On the buyer side, I expected pent-up demand to show up strong in the first half of the year as inflation showed signs of cooling and rates eased modestly off their highs. Buyers who had paused their plans for six to nine months started moving again, and that demand helped keep our market more competitive than the “correction” narrative playing out nationally.

What can homeowners and buyers learn from comparing 2023 predictions to reality?

The biggest lesson is that national housing predictions are a starting point, not a forecast for your neighborhood. Real estate is hyper-local. A national economist forecasting a 6.8% sales decline or a 22.8% inventory jump is describing an average across thousands of different markets, and Montgomery County has never behaved like the national average. If you’re trying to time a purchase or a sale based on headlines about the “housing market,” you need someone who can translate those national numbers into what they actually mean for your street, your school district, and your price point. That’s the gap between a national forecast and a decision you can actually act on.

If you want to see how national trends map onto current local numbers, theNational Association of Realtors research and statistics pageis a solid source for the latest nationwide data, and you can check my ownlocal market statsfor a Montgomery County-specific view.

FAQ

Did home prices crash in 2023 like some people feared?

No. None of the four major forecasts I reviewed predicted a crash, and none of the major markets nationally saw one either. Prices moderated in most areas, with a few exceptions like parts of California, but a broad price collapse never happened.

Were mortgage rates as high as economists predicted in 2023?

Rates stayed elevated compared to 2021 and early 2022, largely as Jacob Channel and others predicted. They didn’t fall back to the ultra-low levels many buyers were hoping for, which kept affordability tight all year.

Why didn’t Montgomery County see the inventory increase economists predicted nationally?

Homeowners with low, locked-in mortgage rates had little incentive to sell and move into a much higher rate, a pattern often called the “lock-in effect.” That kept far fewer homes coming to market here than the national inventory projections suggested.

Is Montgomery County recession-proof?

No, and I’ve never claimed that. It is, however, better insulated than most parts of the country because of a strong local job market and consistently strong schools that keep buyer demand steady even in slower years.

How do I know what these trends mean for my specific home or purchase?

National predictions are a helpful backdrop, but they can’t tell you what your specific home is worth or when it makes sense to buy in your target neighborhood. That requires a local read on your situation, which is exactly the conversation I have with clients every week.

Looking back at a full year of predictions versus reality is a good reminder that the national headlines rarely tell the whole story for Montgomery County. If you’re weighing a move, a sale, or just want a straight answer on where our local market stands today, reach out through mycontact pageor grab time on my calendar.

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Sources and next steps

Verified local sources:U.S. Census QuickFacts for Montgomery County;WMATA maps and schedules;Montgomery County Open Data;Montgomery Parks trails and facilities.

Related Kevin guides:relocation guide;home buying guide;book a call.

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Contextual links for this video

Kevin site links:home selling guide;home buying guide;Montgomery County relocation guide;market stats;California to Maryland: The Honest Truth About Relocating to Montgomery County.

Outside research links for this video:Visit Montgomery travel guide;Visit Montgomery restaurants;Google Maps restaurants near Montgomery County;Reddit discussion search for this topic;Google context search for this video.

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